Mexico Downgraded

Downgrading of national debt I expect to become more commonplace in coming months, and one day will reach Europe and the United States. But today Mexico is in the spotlight, dropping from a BBB+ rating to BBB rating. Business week[1] cites a high reliance on oil taxes and a reluctance to implement a national sales tax as pivotal to the debt downgrade.

The CIA world factbook for Mexico (2008) cites a GDP of $1.56T, with a public debt at 36% of that, or around $560B, and revenues at $257B, with state expenditures at $258B. It varies depending on where you look, though; vague and inconsistent figures are a common pattern when it comes to the unsustainability of government spending.

In other news, political tensions seem to be heating up in Italy, where the prime minister spent some time in the hospital after taking a hit to the face from a gothic cathedral replica[2]. No reason was given to what motivated the 42-year-old assailant, who seems to be getting more fame than notoriety from it—but Italy has one of the higher debt-to-GDP ratios in Europe.

For Italy (2008): GDP is $1.83T, public debt is 106% of GDP (or nearly $2T), revenues are $1.07T, and expenses are $1.13T. A debt-to-revenues ratio of 2 is a pattern in Mexico, Italy, and Greece.

Using the same method for the USA (2008) we have: GDP $14.44T, Public Debt at $37.5% of GDP (or $5.4T, which I wonder how they calculate when we have debt ceiling of $12.1T), revenues at a scant $2.52T (or around $16,000 T*Bux), and expenses at $3T.

Sources:
1. For Want of Higher Taxes, Mexico's Debt is Downgraded.
2. Italy Ponders Wounds as Berlusconi Mends from Attack.