In The News

Restoring US Fiscal Order: Project Syndicate

John B. Taylor January 25, 2020
The United States is weakening its future capability with unsustainable federal spending. The US budget deficit exceeded $1 trillion for the most recent fiscal yea, and the Congressional Budget Office anticipates the federal debt as a share of GDP increasing to at least 144 percent by 2049, and possibly higher. “The large deficit will crowd out important federal programs, including needed...

World Bank Warns of Global Debt Crisis: Guardian

Larry Elliott January 9, 2020
Global economic growth continues, fueled by low interest rates and increasing debt. The high interest rates make debt more manageable, but may not stave off financial crisis. “Total emerging and developing economy debt reached almost 170% of gross domestic product in 2018 – or $55tn (£42tn) – an increase of 54 percentage points of GDP since 2010,” reports Larry Elliott for the Guardian. “The...

Argentina Faces Economic Crisis: Buenos Aires Times

December 13, 2019
Alberto Fernández, sworn in as president of Argentina, inherits enormous debt, recession, inflation, a 10 percent unemployment rate and 40 percent poverty rate, reports the Buenos Aires Times. The peso has lost two thirds of its value since 2018. The many challenges compound the hardship in paying external debt. Fernández promises to increase economic growth but offers no details, partly because...

¥13 Trillion Stimulus Plan in Japan: Japan Times

December 4, 2019
Governments with heavy debt loads are hooked on stimulus and low interest rates. Japan, the world’s third largest national economy, has national debt worth more than 230 percent of its GDP. The Japan Times reports that government officials could add more debt by finalizing plans for a ¥13 trillion stimulus package. The government hopes to take advantage of negative interest rates from the country...

Global Pension Crisis: Financial Times

Josephine Cumbo and Robin Wigglesworth November 26, 2019
Since the financial crisis in 2008, many central banks have implemented easier monetary policies and other tools to stimulate economic growth. Due to those efforts, the interest rates have dropped in many countries, in turn reducing investment gains and swelling debt of pension funds. In some extreme cases, such as Sweden and Switzerland, the central bank policy rate falls below zero, or negative...

Negative Interest Rates in Europe: DW

Uwe Hessler October 5, 2019
Low and negative interest rates keep loans flowing. Europe tries to stimulate its economies with low rates, and some banks charge customers who keep large amounts in their accounts. Governments or individuals can take out an individual €1000 loan and repay only €995, while savers receive no interest at all, explains Uwe Hessler for Deutsche Welle. “A negative deposit rate is intended to encourage...

Argentina on Its Own: Buenos Aires Times

Marcel J. Garcia October 1, 2019
Argentina is experiencing political and economic turmoil, with high debt and inflation, and Argentinians remove savings from banks and avoid the peso. The International Monetary Fund indicates weariness with Argentina’s problems, suggests Marcel J. Garcia for Buenos Aires Times. Argentina represents nearly 60 percent of the IMF portfolio and global credit ratings agencies suggest the country is...