March 17, 2015
Who Will Finance Public Debt?
By Global Business and Economics Program
But the US is far from alone in this cycle: Public debt is rising around the globe as a legacy of the great recession. A mix of large fiscal stimulus packages and nationalization of private-sector debt (mainly banks) added around $20 trillion of public debt globally. The result? Large budget deficits and even more borrowing to service those deficits. With global economic growth expected to be anemic, states will struggle to boost tax receipts or reduce spending on aging populations.
With public indebtedness at all-time highs with no turnaround in sight, competition will be higher among countries to finance their public debt and fewer resources will be available to the private sector.