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Debt Free Zone: How Liechtenstein Manages to Live Within Its Means

As you may have heard, the United States’ gigantic national debt means we’re firmly in our creditors’ pockets. But what about countries on the opposite end of the spectrum? Who’s got the tiniest national debt? In that arena, it’s tough to beat Liechtenstein. The tiny European principality has a whopping external debt of zero dollars.

That’s right; Liechtenstein doesn’t owe anyone cash. Its national credit card is carrying a zero balance. Liechtenstein’s not alone. The CIA’s World Factbook also lists Brunei, Macau, and Palau as having no external debts. How do Liechtenstein and its fellow countries pull off this trick? And can the U.S. swipe any of their secrets?

As far as the second question goes, probably not. Liechtenstein has a lot of factors working in its favor when it comes to keeping its debt low. First, it’s extremely small. The entire country only fills 62 square miles of mountainous terrain between Switzerland and Austria. The tiny speck of land is home to just 35,000 citizens or so. With such a small population, the country hasn’t had a standing army since 1868; it relies on Switzerland for its defense. Liechtenstein doesn’t even have its own unique currency. Instead, it uses the Swiss franc.

Open for Business

Not having to deal with fielding an army or running a monetary system shaves quite a bit off of Liechtenstein’s expenses, but its business atmosphere is its real magic bullet.

The country has exceedingly low business taxes that max out at 20 percent, and the rules for incorporating a business are extremely loose. Thanks to this tax-haven status, businesses from other countries can make quite a bit of cash by incorporating in Liechtenstein while really having little more than a post-office box within the country’s borders.

This little loophole has led to Liechtenstein being home to more than twice as many companies (some 75,000) as people (35,000). The government collects taxes from all these businesses, which brings in boatloads of money. Taxes on these nominal offices generate upwards of 30 percent of the country’s tax revenue.

Image credit: Andrew Bossi, used under Creative Commons license

Liechtenstein’s unique financial arrangements haven’t always helped the principality make friends on the international stage. Other countries have accused Liechtenstein of being one big mountainous tax dodge. The principality was actually on the Organization for Economic Cooperation and Development’s list of “uncooperative tax havens” until May 2009. Since then, Liechtenstein has actively been promoting greater financial transparency in its financial institutions.

On top of that, Liechtenstein’s small population props up a flourishing industrial sector. The country’s factories churn out ceramics and small power tools, and it’s a leading manufacturer of sausage casings. Liechtenstein is also the world’s leading exporter of false teeth.

Liechtenstein’s citizens couldn’t possibly buy all of this stuff, so the great bulk of the production is exported. In 2009 the country’s exports totaled $2.83 billion, while its imports were just $1.77 billion, mostly in raw materials and food.

As the CIA’s World Factbook also notes, 51 percent of Liechtenstein’s labor force commutes in from Austria, Switzerland, or Germany. This setup is another boon for the country, which gets to enjoy these workers’ labor without having to foot the bill for their day-to-day social program expenses.

Thanks to all these little quirks, Liechtenstein’s government runs at a significant surplus. In 2008 the government took in $943 million in revenue against just $820 million in expenses. It’s probably not a recipe that the United States could learn from, but it’s an excellent way to have no national debt.

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travel
The Real Bay of Pigs: Big Major Cay in the Bahamas
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When most people visit the Bahamas, they’re thinking about a vacation filled with sun, sand, and swimming—not swine. But you can get all four of those things if you visit Big Major Cay.

Big Major Cay, also now known as “Pig Island” for obvious reasons, is part of the Exuma Cays in the Bahamas. Exuma includes private islands owned by Johnny Depp, Tyler Perry, Faith Hill and Tim McGraw, and David Copperfield. Despite all of the local star power, the real attraction seems to be the family of feral pigs that has established Big Major Cay as their own. It’s hard to say how many are there—some reports say it’s a family of eight, while others say the numbers are up to 40. However big the band of roaming pigs is, none of them are shy: Their chief means of survival seems to be to swim right up to boats and beg for food, which the charmed tourists are happy to provide (although there are guidelines about the best way of feeding the pigs).

No one knows exactly how the pigs got there, but there are plenty of theories. Among them: 1) A nearby resort purposely released them more than a decade ago, hoping to attract tourists. 2) Sailors dropped them off on the island, intending to dine on pork once they were able to dock for a longer of period of time. For one reason or another, the sailors never returned. 3) They’re descendants of domesticated pigs from a nearby island. When residents complained about the original domesticated pigs, their owners solved the problem by dropping them off at Big Major Cay, which was uninhabited. 4) The pigs survived a shipwreck. The ship’s passengers did not.

The purposeful tourist trap theory is probably the least likely—VICE reports that the James Bond movie Thunderball was shot on a neighboring island in the 1960s, and the swimming swine were there then.

Though multiple articles reference how “adorable” the pigs are, don’t be fooled. One captain warns, “They’ll eat anything and everything—including fingers.”

Here they are in action in a video from National Geographic:

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Pop Culture
The House From The Money Pit Is For Sale

Looking for star-studded new digs? For a cool $5.9 million, Top10RealEstateDeals.com reports, you can own the Long Island country home featured in the 1986 comedy The Money Pit—no renovations required.

For the uninitiated, the film features Tom Hanks and Shelley Long as hapless first-time homeowners who purchase a rundown mansion for cheap. The savings they score end up being paltry compared to the debt they incur while trying to fix up the house.

The Money Pit featured exterior shots of "Northway," an eight-bedroom estate located in the village of Lattingtown in Nassau County, New York. Luckily for potential buyers, its insides are far nicer than the fictional ones portrayed in the movie, thanks in part to extensive renovations performed by the property’s current owners.

Amenities include a giant master suite with a French-style dressing room, eight fireplaces, a "wine wall," and a heated outdoor saltwater pool. Check out some photos below, or view the entire listing here.

The real-life Long Island home featured in “The Money Pit”
TopTenRealEstateDeals.com

The real-life Long Island home featured in “The Money Pit”
TopTenRealEstateDeals.com

The real-life Long Island home featured in “The Money Pit”
TopTenRealEstateDeals.com

The real-life Long Island home featured in “The Money Pit”
TopTenRealEstateDeals.com

The real-life Long Island home featured in “The Money Pit”
TopTenRealEstateDeals.com

The real-life Long Island home featured in 1986's “The Money Pit”
TopTenRealEstateDeals.com

The real-life Long Island home featured in 1986's “The Money Pit”
TopTenRealEstateDeals.com

[h/t Top10RealEstateDeals.com]

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