Global Economy

Topics: Subprime mortgage crisis, Financial crisis, Money Pages: 2 (455 words) Published: April 15, 2013
In this report, it discussed Chinese, German, Greek and American government debts, deficit and GDP respectively. All of debts in these countries are show a rise trend but still have some difference. To give more details, Greek debts shown a continued increase as same as German, while American government debts had a 3 years decline between 1998 and 2001. After the American financial crisis broke out in 2007, it presents a rapid growth trend reach to 102.93(%GDP) in 2011. Chinese shown a top point in 2010, which up to 33.5% of GDP while other years had fluctuated increase trend.

In different countries have different reasons for these situations. In Greece, the main reason lead to the debt increase is high social welfare; the government needs more funds so they issue a large number of debentures. These debentures cause a big financial burden and lead the debt crisis broke out. The social welfare is also one of reason for debt growth in US; another main reason for debts and deficit increase is because US takes many military operation and some counter-terrorism measures,these measure increase government spending. The heavy borrowing to develop technology and other non-developed sectors is the reason leads the government debts and deficit increase in Germany. China used proactive fiscal policy, like China government issued more treasury bonds and invest lots of money or infrastructure construction, these are the reasons conduce to the government debts and deficit change in China. The government debts and deficit has a close connection with economic growth. The higher government debts de deficit is, the slower the economy growth, it is means government debts and deficit prevent the economy development. In order to decrease the government debt and deficit, the government take some fiscal behavior, for instance, government decrease the interest rate, in order to stimulus the economy. Due to the interest rate decrease, the companies more willing to...
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