{"id":65717,"date":"2023-08-31T08:24:09","date_gmt":"2023-08-31T13:24:09","guid":{"rendered":"https:\/\/olduvai.ca\/?p=65717"},"modified":"2023-08-31T08:24:09","modified_gmt":"2023-08-31T13:24:09","slug":"why-the-worlds-big-debt-loads-may-be-here-to-stay","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=65717","title":{"rendered":"Why the world&#8217;s big debt loads may be here to stay"},"content":{"rendered":"<div class=\"flex flex-col items-start sm:space-y-6 space-y-4 mb-6 sm:mb-10\">\n<h3 class=\"text-soft-black-core h5 md:h3 font-regular\" data-cy=\"story-headline\"><a href=\"https:\/\/www.axios.com\/2023\/08\/29\/economy-global-debt\">Why the world&#8217;s big debt loads may be here to stay<\/a><\/h3>\n<\/div>\n<figure class=\"StoryImage_caption__oW2Fs m-0\" data-cy=\"au-image\"><img loading=\"lazy\" decoding=\"async\" class=\"m-0\" src=\"https:\/\/images.axios.com\/I5zYwUHDsxVzW4XqD8JmCP6Pxao=\/0x0:1920x1080\/1920x1080\/2023\/08\/29\/1693277848527.jpg?w=1920\" sizes=\"auto, 100vw\" srcset=\"https:\/\/images.axios.com\/ueEzpMcKq3J010TOiDlPViu7ktk=\/0x0:1920x1080\/320x180\/2023\/08\/29\/1693277848527.jpg?w=320 320w, https:\/\/images.axios.com\/ueEzpMcKq3J010TOiDlPViu7ktk=\/0x0:1920x1080\/320x180\/2023\/08\/29\/1693277848527.jpg?w=320 320w, https:\/\/images.axios.com\/2wriLk0QYTQwP2frsbOy3eom6UE=\/0x0:1920x1080\/640x360\/2023\/08\/29\/1693277848527.jpg?w=640 640w, https:\/\/images.axios.com\/2wriLk0QYTQwP2frsbOy3eom6UE=\/0x0:1920x1080\/640x360\/2023\/08\/29\/1693277848527.jpg?w=640 640w, https:\/\/images.axios.com\/0fQ5yq4_oMF7tEYM8XlBrUMHOp4=\/0x0:1920x1080\/768x432\/2023\/08\/29\/1693277848527.jpg?w=768 768w, https:\/\/images.axios.com\/0fQ5yq4_oMF7tEYM8XlBrUMHOp4=\/0x0:1920x1080\/768x432\/2023\/08\/29\/1693277848527.jpg?w=768 768w, https:\/\/images.axios.com\/6WbiiKPbL-g4WKqu98lUzYAS4d4=\/0x0:1920x1080\/1024x576\/2023\/08\/29\/1693277848527.jpg?w=1024 1024w, https:\/\/images.axios.com\/6WbiiKPbL-g4WKqu98lUzYAS4d4=\/0x0:1920x1080\/1024x576\/2023\/08\/29\/1693277848527.jpg?w=1024 1024w, https:\/\/images.axios.com\/JDYo5NGqfplODTHYFhe63xbelL8=\/0x0:1920x1080\/1366x768\/2023\/08\/29\/1693277848527.jpg?w=1366 1366w, https:\/\/images.axios.com\/JDYo5NGqfplODTHYFhe63xbelL8=\/0x0:1920x1080\/1366x768\/2023\/08\/29\/1693277848527.jpg?w=1366 1366w, https:\/\/images.axios.com\/9sWJXg4-_Gur-YVxQUKf_BdUzpE=\/0x0:1920x1080\/1600x900\/2023\/08\/29\/1693277848527.jpg?w=1600 1600w, https:\/\/images.axios.com\/9sWJXg4-_Gur-YVxQUKf_BdUzpE=\/0x0:1920x1080\/1600x900\/2023\/08\/29\/1693277848527.jpg?w=1600 1600w, https:\/\/images.axios.com\/I5zYwUHDsxVzW4XqD8JmCP6Pxao=\/0x0:1920x1080\/1920x1080\/2023\/08\/29\/1693277848527.jpg?w=1920 1920w, https:\/\/images.axios.com\/I5zYwUHDsxVzW4XqD8JmCP6Pxao=\/0x0:1920x1080\/1920x1080\/2023\/08\/29\/1693277848527.jpg?w=1920 1920w\" alt=\"Illustration of the earth with the land in the shape of a percent sign.\" width=\"1920\" height=\"1080\" data-cy=\"StoryImage\" data-nimg=\"1\" \/><figcaption class=\"pt-3 text-caption font-sans text-soft-black-shade\">Illustration: Brendan Lynch\/Axios<\/p>\n<\/figcaption><\/figure>\n<div class=\"DraftjsBlocks_draftjs__jDHy3\">\n<p>Staggeringly\u00a0<a class=\"gtmContentClick\" href=\"https:\/\/www.axios.com\/2023\/06\/29\/cbo-federal-deficit\" target=\"_self\" data-vars-link-text=\"high government debt levels\" data-vars-click-url=\"https:\/\/www.axios.com\/2023\/06\/29\/cbo-federal-deficit\" data-vars-content-id=\"b2aa8f87-1f3f-488d-9cab-f20482012e15\" data-vars-headline=\"Why the world's big debt loads may be here to stay\" data-vars-event-category=\"story\" data-vars-sub-category=\"story\" data-vars-item=\"in_content_link\" rel=\"noopener\">high government debt levels<\/a>\u00a0around the globe may stick \u2014 a huge shift from previous years that could come despite the warnings of economic damage this dynamic may cause.<\/p>\n<p><strong>Why it matters:<\/strong>\u00a0Aging populations, worsening partisanship, steepening interest rates and other factors could make it less feasible for governments to reduce their debt \u2014 even if they want to.<\/p>\n<p><strong>What they&#8217;re saying:<\/strong>\u00a0&#8220;[D]ebt reduction, while desirable in principle, is unlikely in practice,&#8221; International Monetary Fund economist Serkan Arslanalp and University of California, Berkeley, professor Barry Eichengreen write in\u00a0<a class=\"gtmContentClick\" href=\"https:\/\/www.kansascityfed.org\/Jackson%20Hole\/documents\/9749\/JH_Paper_Eichengreen.pdf\" target=\"_blank\" rel=\"noopener\" data-vars-link-text=\"a new paper\" data-vars-click-url=\"https:\/\/www.kansascityfed.org\/Jackson%20Hole\/documents\/9749\/JH_Paper_Eichengreen.pdf\" data-vars-content-id=\"b2aa8f87-1f3f-488d-9cab-f20482012e15\" data-vars-headline=\"Why the world's big debt loads may be here to stay\" data-vars-event-category=\"story\" data-vars-sub-category=\"story\" data-vars-item=\"in_content_link\">a new paper<\/a>.<\/p>\n<ul>\n<li>Ballooning government debt worldwide won&#8217;t decline significantly in the coming years as in decades past, they argue. &#8220;Countries are going to have to live with this new reality as a semipermanent state.&#8221;<\/li>\n<\/ul>\n<p><strong>Details:\u00a0<\/strong>The paper, presented Saturday before global central bankers and leading economists at the Kansas City Fed&#8217;s Jackson Hole conference, says a collision of new forces will make it difficult to trim debt.<\/p>\n<ul>\n<li><strong>Demographics:<\/strong>\u00a0Aging populations mean governments must spend more on health care and pensions.<\/li>\n<li><strong>Green transition:<\/strong>\u00a0In the U.S. and elsewhere, governments are ramping up spending to finance the\u00a0<a class=\"gtmContentClick\" href=\"https:\/\/www.axios.com\/2023\/08\/14\/climate-law-solar-energy\" target=\"_self\" data-vars-link-text=\"transition to a greener economy\" data-vars-click-url=\"https:\/\/www.axios.com\/2023\/08\/14\/climate-law-solar-energy\" data-vars-content-id=\"b2aa8f87-1f3f-488d-9cab-f20482012e15\" data-vars-headline=\"Why the world's big debt loads may be here to stay\" data-vars-event-category=\"story\" data-vars-sub-category=\"story\" data-vars-item=\"in_content_link\" rel=\"noopener\">transition to a greener economy<\/a>.<\/li>\n<li><strong>Interest rates:<\/strong>\u00a0Higher borrowing costs mean any growing debt load will get even more expensive to service. (Meanwhile, inflating the debt away is not a &#8220;sustainable route to reducing high public debts,&#8221; the authors note.)<\/li>\n<li><strong>Politics:<\/strong>\u00a0Political polarization and divided government make long-lasting policy arrangements to trim the debt\u2014 raising taxes or cutting spending\u2014 &#8220;even more challenging than in the past,&#8221; the authors write.<\/li>\n<\/ul>\n<p><strong>Of note:<\/strong>\u00a0Stronger-than-expected economic growth \u2014 caused by, say, a larger increase in productivity \u2014 could stabilize debt-to-GDP ratios.<\/p>\n<p>\u2026click on the above link to read the rest\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Why the world&#8217;s big debt loads may be here to stay Illustration: Brendan Lynch\/Axios Staggeringly\u00a0high government debt levels\u00a0around the globe may stick \u2014 a huge shift from previous years that could come despite the warnings of economic damage this dynamic may cause. Why it matters:\u00a0Aging populations, worsening partisanship, steepening interest rates and other factors could [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[16979,33922,195,364,380],"class_list":["post-65717","post","type-post","status-publish","format-standard","hentry","category-economics","tag-axios","tag-courtenay-brown","tag-debt","tag-global-debt","tag-government-debt"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=65717"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65717\/revisions"}],"predecessor-version":[{"id":65718,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65717\/revisions\/65718"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=65717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=65717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=65717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}