| ▲ | oersted 15 hours ago | |
GDP is also an amalgam of various indicators of general economic activity: Consumption + Investment + Government Spending + (Exports - Imports). It might be all in dollars, but it is kinda like adding $X of Apples with $Y of Oranges. Its good as a rough score to do relative comparisons between countries (and actually Debt/GDP is useful in that sense too), but as an absolute amount it doesn't mean all that much. What matters is how much the debt servicing costs versus government revenues. Also how much that debt is growing (deficit) and/or what it would cost to reduce it. But there's not much of a consensus around what is too much or too little. I suppose 100% Debt/GDP is a good arbitrary number to raise the alarm, but it doesn't mean much on its own. | ||