This is the correct answer and analysis, Pontiac. All debt isn’t the same. So to categorically state that 90% debt to GDP ratios lead to negative or slowed growth is nonsense on it’s face.
The trouble with GDP calculatons is that government spending, as a result of that debt, is included in the GDP print. This then pumps up GDP. But not all debt is the same.
Governments can invest in any number of “good” or “bad” schemes. At best you’ll find a correlation, not causation. You have to analyze the spending that the debt is used for.
Well you really have to go a bit further.
The analysis shows that the countries in question had these debt loads only about 5 years. These short periods of high debt to GDP ratios can only happen when the reasons for the debt are temporary.
The reasons for our debt and that of the European democracies are institutionalized social welfare entitlements that can only go away at the cost of painful social upheaval that can topple governments.
The political class know this and this is why that these high debt to GDP ratios are not going away anytime soon and most likely will not go away until the world economy collapses under the weight of this debt.
Well you really have to go a bit further.
The analysis shows that the countries in question had these debt loads only about 5 years. These short periods of high debt to GDP ratios can only happen when the reasons for the debt are temporary.
The reasons for our debt and that of the European democracies are institutionalized social welfare entitlements that can only go away at the cost of painful social upheaval that can topple governments.
The political class know this and this is why that these high debt to GDP ratios are not going away anytime soon and most likely will not go away until the world economy collapses under the weight of this debt.