A lot of people don't think it does, at least not yet. They point to Japan as an example of a country that has a much higher debt-to-GDP ratio and is doing fine. Peter Schiff said they're looking at the wrong country. The US is more like Argentina than Japan.

The debt to GDP ratio in Japan is over 200%. The US debt-to-GDP ratio is only around 125%. If Japan is doing fine, why should we worry here in the US?

Peter notes the fact that Japan isn't really doing "fine."

They're having a problem right now in Japan. They're on the cusp of a crisis."

The yield on a 10-year Japanese Government Bond is up to 8.7%. The yen recently broke the 150 mark. Meanwhile, price inflation is ratcheting up.

Don't say, 'Hey, Japan got off scot-free.' They didn't. They're about to get their come-uppins."

Peter said the US is in a different situation than Japan and it will get its come-uppins sooner. It will never get to a 200% debt-to-GDP ratio. The US won't even get to 150%.

Why not?

Peter said the big difference between the US and Japan is that Japan is a net creditor and the Japanese people save at a much higher rate than Americans.