Is the Chinese Way of Spending Better than the American Way?

I recently read an article from www.wisebread.com which inspired me to think about the differences between how Americans and the Chinese spend money. It was great to see that not every culture spends like we do in America, especially, since Americans live in a debt epidemic.

Has the United States gone too far with its 12 trillion in debt and 150 trillion in future debts? What about the fact that our gross domestic product is only about 10 trillion dollars? This means, as a nation, we are over a year's salary in debt since we take home about 2 trillion dollars. How would an individual's personal finances look, if they mirrored that of our nation? In other words, what is a good ratio for personal debt to earnings and should our nation be required to satisfy the same guidelines?

On a post from www.easeconomics.com, the author states that a person with 20% debt and 80% cash is highly leveraged. People should treat their personal finances as if they were a business. This involves looking at financial metrics such as debt to income ratio. By the way, most loans would not even be considered if the DTI was above 50% (see blogs.cfed.org).

On the other hand, our government runs on a 120% DTI.  Is this good?  Is this fair?  What would Warren Buffet think?

This post was reposted from http://finlit.biz/debt/is-the-chinese-way-of-spending-better-than-the-american-way/, originally written on January 20th, 2013.