The $39 trillion U.S. national debt isn't as high as Japan's and Singapore's relative to economy size—and yet it's still worse somehow | Fortune

Statistics don’t always tell the full story, and the U.S. national debt is evidence as to why.

Despite its $39 trillion national debt, the U.S. barely cracks the top 10 in countries for debt relative to the size of their economies. While on the surface this may seem like a good thing, economists warn that actually, the U.S. still has more to worry about than even the countries with ballooning debt-to-GDP ratios.

The U.S. still has the largest national debt of any other country—with the total topping $39 trillion in May—more than double China’s $18.7 trillion debt, according to the most recent IMF World Economic Outlook data published in April. However, relative to the size of the economy, America’s debt ratio, about 126%, is still considerably smaller than Japan’s 204% and Singapore’s 172%.

There’s no magic number for when a debt-to-GDP ratio becomes dangerous, but Japan’s 200% signifies that the country’s national public double is double the size of its economy. In other words, if a country were to devote all economic gains toward paying off its debt, it would still take two years to pay the debt down completely.

Even with a lower 122% debt-to-GDP ratio, the U.S.’s borrowing is still greater than the size of its entire economy. Apollo chief economist Torsten Slok warned the staggering rate at which the U.S. is accumulating debt—about $7 billion per day—is atrophying the U.S.’s ability to respond to a recession. That’s because the U.S. can’t readily add stimulus to the economy, such as tax cuts or infrastructure spending, lest it goes deeper into the hole. But the Federal Reserve also can’t cut rates to incentivize borrowing because it runs the risk of hiking inflation and disrupting the demand balance for new bonds.