The world is sitting on a $91 trillion problem. ‘Hard choices’ are coming

Governments owe an unprecedented $91 trillion, an amount almost equal to the size of the global economy and one that will ultimately exact a heavy toll on their populations.

by Hanna Ziady

LondonCNN — Governments owe an unprecedented $91 trillion, an amount almost equal to the size of the global economy and one that will ultimately exact a heavy toll on their populations.

Debt burdens have grown so large — in part because of the cost of the pandemic — that they now pose a growing threat to living standards even in rich economies, including the United States.

Yet, in a year of elections around the world, politicians are largely ignoring the problem, unwilling to level with voters about the tax increases and spending cuts needed to tackle the deluge of borrowing. In some cases, they’re even making profligate promises that could at the very least jack up inflation again and could even trigger a new financial crisis.

The International Monetary Fund last week reiterated its warning that “chronic fiscal deficits” in the US must be “urgently addressed.” Investors have long shared that disquiet about the long-term trajectory of the US government’s finances.

“(But) continuing deficits and a rising debt burden have (now) made that more of a medium-term concern,” Roger Hallam, global head of rates at Vanguard, one of the world’s largest asset managers, told CNN.

As debt burdens mount around the world, investors are growing anxious. In France, political turmoil has exacerbated concerns about the country’s debt, sending bond yields, or returns demanded by investors, soaring.

The first round of snap elections Sunday suggested that some of the market’s worst fears might not come to pass. But even without the specter of an immediate financial crisis, investors are demanding higher yields to buy the debt of many governments as shortfalls between spending and taxes balloon.

Higher debt servicing costs mean less money available for crucial public services or for responding to crises such as financial meltdowns, pandemics or wars.

Since government bond yields are used to price other debt, such as mortgages, rising yields also mean higher borrowing costs for households and businesses, which hurt economic growth.

As interest rates rise, private investment falls and governments are less able to borrow to respond to economic downturns.

---

---

The Most Dangerous Superstition by Larken Rose - exposes the myth for what it is, showing how nearly everyone, as a result of one particular unquestioned assumption, directly contributes to violence and oppression without even realizing it.

The Art of Liberty Foundation has copies of The Most Dangerous Superstition for $14 https://government-scam.com/product/the-most-dangerous-superstition/

OR

The "Trifecta Bundle" with a copy of "Government" - The Biggest Scam in History... Exposed! and a Liberator Flash Drive for $60 https://government-scam.com/product/trifecta/

OR

An “Everything Bundle” with everything in “The Trifecta Bundle” PLUS a copy of Larken's book: What Anarchy Isn't, Sedition, Subversion & Sabotage by The Bad Quaker, Anarchy Exposed (Voluntaryism/Anarchy for Cops) by Larken Rose and Shepard the Voluntaryist, and Three Friends Free (Voluntaryism/Anarchy for Kids by Anam Paiseanta) for $100. https://government-scam.com/product/everything-package/