Fiscal Profligacy and Public Debt: Counting the Costs
Wednesday 16 September 2009
Bank bailouts, fiscal stimuli, increased spending on unemployment benefits and other entitlement programmes due among other things to rapid ageing, are causing sharp rises in debt levels.
The debt-to-GDP ratio in the advanced countries was high before the crisis. The IMF forecasts that it will exceed 100% in the next few years. The situation is quite different in most emerging market countries.
The conference call will explore the policy implications of such dramatic accumulation of public debt. It will seek answers to the following questions:
- What are the ‘proper’ levels of government deficits and debt?
- What are the consequences for exchange rates?
- Is there a risk of sovereign default? If so, where is it most severe?
- Are higher taxes inevitable? If so, who will be expected to pay them?
- What impact will high levels of debt have on public spending?
- When can private sector demand be expected to take up the strain and allow governments to adopt ‘exit strategies’?
