Global Crisis Illustrates Dangers of High Debt

During the worldwide economic downturn of the past several years, many countries incurred high deficits because they initiated spending programs to stimulate their economies. While some countries have been successful in stimulating output and spurring employment, the debt levels of most countries have risen, increasing the chance of sovereign defaults in countries such as Greece. There are currently 21 sovereign nations on the S&P poten-tial downgrade list, 16 of which are in Europe or the Middle East/ Africa. Even Japan joins the United States as a country facing a possible rating downgrade. On April 27, 2011, Japan's outlook was revised to negative, as well. Its deficit was cited as a concern, ...

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