The debt of a country, if it does not default on it or try to print it away, must be borne by the population, most likely for generations to come. So, if we divide the debt of a country by the population, we get a quick measure of how much debt each person must bear due to the country’s fiscal policies over the years.
For example, looking at the list of countries by external debt:
We see that each immigrant to the US, or child born there, inherits $60,526 of debt. Some other top debtors are: the UK: $127,000/person, France: $87,200 and Germany: $69,000
Likewise, a citizen that renounces their citizenship for the US (due to taxation on worldwide income) or stops becoming a tax resident of their county by leaving, receives a net gain.
An alternative metric is the Net International Investment Position:
In which case, immigrants to the following countries inherit the following debt per capita:
US: $43,460
UK: $11,934
Singapore: +$182,040 (you make this amount by becoming a PR or citizen in Singapore)
Taiwan: +$58,184 (likewise for Taiwan)
All figures in US$
What do you all think? How does living in a country which is a net debtor, or creditor play out, on a day to day basis?
For example, if one lived in a country which was a net debtor, would you generally be looking at a higher poverty rate, less disposable income, lower savings, higher taxes, lower financial freedoms, etc.? In the worst case, a prospect of hyperinflation and collapse of living standards.
Incidentally, how did the US swing so dramatically from being a large creditor, to a large debtor?
Can you find any common denominator among the countries which are net creditors, and those which are net debtors (from the Net International Investment Position metric)? It seems net creditors generally have educated populations, low corruption and/or oil. The net debtors seem to be corrupt countries.