Talking about debt really only makes sense when you talk about it relative to the ability to finance that debt.
When it comes to economies, one of the more popular ways to measure debt is to consider it as a percentage of GDP.
Vanguard’s new 2014 outlook note included this debt heat map for the major economies around the world.
Debt allows economies to leverage growth. But it also makes them a credit risk. And when debt is high during a period of slow or negative growth, debt maintenance costs can become quite onerous.
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