Post by account_disabled on Mar 5, 2024 4:04:04 GMT
National leaders like to describe the fight against Covid-19 as a war. This is mostly used as a metaphor, but in one sense they are right, writes The Economist. Public borrowing in rich countries is expected to reach levels last seen amid the wreckage and smoke of 1945. As the economy slumps dramatically, governments are handing out millions of checks to households and companies to help them survive closures and quarantines. At the same time, with factories, shops and offices closing, tax revenues are drying up. Long after hospitals are emptied of Covid-19, countries will live with the consequences. Public finances are falling to extraordinary levels.
The US government is forecasting a deficit Cambodia Telegram Number Data of 15% of GDP this year – a figure that will rise further if more stimulus is needed. The IMF says that across all rich countries, gross government debt will rise by $6 trillion, reaching $66 trillion by the end of the year, or from 105% of GDP to 122% – an increase greater than every year during the global financial crisis. If the blockages will last longer, the burden will be even greater. Managing such colossal debts will burden Western societies for decades. One of the most feared issues in the economy is the high level of government borrowing. The national debt clock that unfolds near Times Square in New York has been warning of impending fiscal Armageddon since 1989.
In fact, a country's public debt is not like a household's credit card balance. When the national debt is owned by its citizens, a country is in debt to itself. Read also: The need for a sustainable budget and a fair tax burden The risk of old age without a pension, the debt is expanding rapidly from year to year Debt can be high, but what matters is the cost of servicing it, and as long as interest rates are low, it's still cheap. In 2019, America spent 1.8% of GDP on debt interest, less than the amount it spent 20 years ago. In 2019, Japan's gross public debt was almost 240% of GDP, but most signs were that it was manageable.
The US government is forecasting a deficit Cambodia Telegram Number Data of 15% of GDP this year – a figure that will rise further if more stimulus is needed. The IMF says that across all rich countries, gross government debt will rise by $6 trillion, reaching $66 trillion by the end of the year, or from 105% of GDP to 122% – an increase greater than every year during the global financial crisis. If the blockages will last longer, the burden will be even greater. Managing such colossal debts will burden Western societies for decades. One of the most feared issues in the economy is the high level of government borrowing. The national debt clock that unfolds near Times Square in New York has been warning of impending fiscal Armageddon since 1989.
In fact, a country's public debt is not like a household's credit card balance. When the national debt is owned by its citizens, a country is in debt to itself. Read also: The need for a sustainable budget and a fair tax burden The risk of old age without a pension, the debt is expanding rapidly from year to year Debt can be high, but what matters is the cost of servicing it, and as long as interest rates are low, it's still cheap. In 2019, America spent 1.8% of GDP on debt interest, less than the amount it spent 20 years ago. In 2019, Japan's gross public debt was almost 240% of GDP, but most signs were that it was manageable.