Chapter 3A Way of Life
The Hippocratic Oath says do harm and bear the consequences. A “no harm fiscal policy” in the short term can question long-term sustainability. This type of no harm policy is intimately linked to a country’s reputation of past and perhaps future defaults. It falls under the definition of “debt intolerance.” It is a threshold for a country’s gross debt level at which it is perceived to be no longer safe. The most often watched metric is a country’s ratio of debt to gross domestic product (GDP). Whereas the ratio is dynamic, GDP can expand or contract the amount of debt outstanding (through government spending or cuts). Debt can also affect economic growth. It is a number that has become of greater focus over the past years. ...
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