Governments have three basic methods for financing their expenditures: they can use tax money collected, borrow money, or print new money. Unfortunately, each of these methods has its drawbacks.

For a variety of reasons, borrowing can be the best option. When governments borrow, a common form that this borrowing takes on is the issuance of government investment securities. For example, the United States government does it by issuing Treasury Bonds, Treasury Notes, and Treasury Bills.

The government debt is simply the balance of these outstanding securities at any point in time. To the government, it is a debt. To those who purchase these securities, it is an investment.

Governments that always honor the commitments to repay these securities according to the terms at issuance, and don’t use inflated money to do so, will be selling them to people who get what they expect out of their investments: those governments will more likely have superior credit ratings, which means that they will have no problem using this method of financing in the future.

Countries With The Most Debt 2018

10. Spain

As with all Euro nations, the Kingdom of Spain is obliged to count its national debt according to the rules laid down in the Maastricht Treaty. This counts all public debt as the national debt. However, there is a lot of room for maneuver in those rules.

There are many debts that the Spanish government doesn’t include in the national figure, even though they originate from the public sector and so should be within the remit of public debt.

These include the obligations for future payments under the national pension scheme, public employees’ pensions, bank depositor guarantees, the debts of state-owned enterprises, and outstanding payments represented by unpaid invoices. The IMF lists Spain’s gross debt to GDP ratio as 98% at the end of 2017 and its net debt to GDP ratio as 86%.

External Debt: $2,259,127,000,000

9. Ireland

The national debt of Ireland refers to all of the debt owed by the national government under standard financial instruments. Local government debt, unpaid invoices, pension obligations, and lease agreements are not counted as part of the debt.

In the case of Ireland, there is one other obligation, which would increase the record figure of Ireland’s national debt if it was recognized by standard accounting conventions in the governments’ account. That are the guarantees that the Irish government issued to underwrite all deposits made to Irish banks.

External Debt: $2,384,247,000,000

8. Italy

The Italian government debt is the public debt owed by the government of Italy to all public and private lenders. As of January 2014, the Italian government debt stands at €2.1 trillion (131.1% of GDP). However, Italy has the lowest share of public debt held by non-residents of all eurozone countries, and the country’s national wealth is four times larger than its public debt.

External Debt: $2,510,690,000,000

7. Japan

The national debt of the Empire of Japan consists of the money owed by the country’s central government, which is based in Tokyo. The debts of the country’s local governments are not counted as part of the country’s national debt. Other obligations that aren’t counted include guarantees for the debts of other agencies, pension obligations, and unpaid bills.

According to the IMF, Japan’s national debt to GDP ratio was 236% in 2017, making it the highest national debt globally compared to the national income.

External Debt: $3,586,817,000,000

6. Luxembourg

The national debt of Luxembourg is counted as the debts accumulated by all layers of the country’s government. It is also known as “general government debt.” No private sector debts are included in the national debt figure, and some public sector debt factors aren’t included. Economists are interested in a country’s ability to repay its debts, so national debt figures are usually expressed as a percentage of the country’s income, or “GDP.” This is called the debt to GDP ratio, expressed as a percentage.

International economics bodies use different methods to calculate national debt. As a member of the EU, Luxembourg has to record its government debt following guidelines laid down in the Maastricht Treaty.

External Debt: $3,781,000,000,000

5. Netherlands

The IMF counts general government debt as the national debt. At the end of 2017, the organization calculated the gross national debt of the Netherlands as 56.7% of the country’s GDP. That figure adds up to all of the national government’s debt. Net debt deducts the financial assets from the gross debt figure. The IMF’s net national debt estimate for the Netherlands was 46.2% of GDP in 2017.

The OECD counts all public debt, including all levels of government and state-owned agencies. This version of the national debt worked out at 70% of GDP for the Netherlands at the end of 2017.

External Debt: $4,510,400,000,000

4. Germany

Germany’s national debt includes the money raised by Germany’s federal government through the issuance of debt instruments. Germany also includes the debts of its states and local government in the national debt figure. Germany refers to its national debts as “public debt.”

The German government was forced to bail out some banks during the financial crisis of 2008. However, the government still owns those banks, including their debts in the nation’s public debt record. The Federal Ministry of Finance, based in Berlin, is responsible for managing Germany’s national debt, including raising funds. The Department of Financial Market Policy, also known as Directorate-General VII, is the Ministry department that is specifically in charge of overseeing all debt management issues on behalf of the government.

External Debt: $5,398,267,000,000

3. France

France’s national debt is measured as all government debt. This includes any debts accrued by regional and departmental governments. However, those lower levels of government are not allowed access to debt markets directly. Therefore, pension obligations, Bank depositor guarantees, government guarantees on loans taken out by other institutions, the debts of state-owned enterprises, and outstanding short-term debt represented by unpaid invoices are not counted as part of France’s national debt.

According to the IMF, at the end of 2017, France’s gross national debt to GDP ratio was 97%. At the same time, the country’s net debt to GDP was 87%. These two figures are close and show that the government finances its pensions out of its annual budget rather than building an investment fund for the pension system.

External Debt: $5,689,745,000,000

2. United Kingdom

Britain’s record national debt, which just surpassed £1 trillion, is a figure that can only exponentially increase unless the entire mechanism of Government finance is overhauled. The truth, however, is much worse; factoring in all liabilities, including state and public sector pensions, the real national debt is closer to £4.8 trillion, some £78,000 for every person in the UK.

External Debt: $8,475,956,000,000

1. the United States

The United States national debt is counted as all of the debt owed by the federal government, based in Washington DC. Debts owed by states are not included in the figure.

The IMF records the US national debt as the 16th highest in the world when expressed as a percentage of the country’s GDP. This is because the USA owes a sum greater than its GDP, which is the country’s annual income. US government debt is the responsibility of the Treasury Department. Money is raised in the form of bonds, which are known as “Treasury bonds,” “Treasury bills,” or “T-bills.”

Bonds are sold in auctions, which the Federal Financing Bank conducts; each sale event can raise a maximum of $15 billion.

External Debt: $22,284,900,000,000

This is a list of countries by external debt, which is the total public and private debt owed to nonresidents repayable in internationally accepted currencies, goods or services, where the public debt is the money or credit owed by any level of government from the central to local, and the private debt the cash or credit owed by private households or private corporations based in the country under consideration.

This article originally appeared on The Commodity and was reproduced here with permission.