What is public debt?
– Definition, Data and Forecasts Public debt, sometimes also referred to as government debt, represents the total outstanding debt (bonds and other securities) of a country’s central government. It is often expressed as a ratio of Gross Domestic Product (GDP).
What happens when the public debt exceeds 77% of GDP?
Public debt allows governments to raise funds to grow their economy or pay for services. Politicians prefer to raise public debt rather than raise taxes. When public debt reaches 77% of GDP or higher, the debt begins to slow growth. Don’t confuse public debt with external debt.
How high will the public debt rise?
Moreover, public debt is expected to reach 115% of GDP. “In arguably the most benign case whereby the economy contracts around 3%, that still implies a fiscal deficit of around 12% of GDP.
Why do politicians raise public debt instead of taxes?
Politicians prefer to raise public debt rather than raise taxes. When public debt reaches 77% of GDP or higher, the debt begins to slow growth. Don’t confuse public debt with external debt. That’s the amount owed to foreign investors by both the government and the private sector.