Government borrowing is common practice.

 

うわーい　日本が世界の中心だ
累積政府債務のGDP比　※赤い，面積が大きい，内側にあるほど値が大きいhttps://t.co/nxoA80BEWD pic.twitter.com/AbPAQfX3yG

— Spica (@Kelangdbn) October 12, 2021

Such significant debt burdens are the result of non-traditional monetary policies, many of which were first implemented by Japan, then adopted by others. In the late 1990s, for instance, the Bank of Japan (BoJ) set interest rates at 0% to counter deflation and promote economic growth.

This low cost of borrowing enables businesses and governments to accumulate debt much more freely, and has seen widespread use among other developed nations post-2008.

What are the Risks?

Given that a majority of countries in this visual are red (meaning their debt-to-GDP ratios are over 50%), it’s safe to say that government borrowing is common practice.

But are large government debts a cause for concern?

Some believe that excessive borrowing will lead to higher interest costs in the long run, which could detract from economic growth and public sector investment. This theory is unlikely to become a reality anytime soon, however.

A recent report by RBC Wealth Management reported that the cost of servicing U.S. federal debt actually decreased in 2020, thanks to the low borrowing costs mentioned previously.

なるほど。

要するに、金利が低いー日本の場合ほぼゼローから、借金があってもそれほど心配ない、と。たぶん、これが、日本は例外だ、とBlanchard が言っていた意味だな。

What are the consequences of the growing government debt dilemma?

INVESTING

Last updated: December 02, 2020

BBCの分析でも、

Our fixed income strategist asserts that “while some may harbor reservations and fears about rising debt levels, that shift should be a net-positive in terms of systemic risks, in our view, as the federal government obviously has greater capacity and more avenues to address debt service than the U.S. consumer, not least of which is the ability to print its own money.”

He goes on to add, “We continue to believe that deficits and overall levels of publicly held U.S. federal debt are not a material concern for investors over the near and intermediate term. Higher Treasury supply alone is not sufficient to send yields higher, based on historical correlations. Factors such as the path of Fed policy rates, GDP growth, and inflation expectations matter to a much greater degree.”

家計と違って、政府がお札刷れたり他のこともできるから借金はそれほど心配ない。むしろ金利やGDP成長率、インフレ予想のほうが問題だ、と。

つまりは、”当分は”政府の借金についてそれほど心配していなけど、

 The more that debt and debt-to-GDP mount over the longer term, the more governments and taxpayers will enter uncharted territory. It’s unclear to us where the tipping point is between manageable and unmanageable debt loads. So far, markets are behaving as though any tipping point is a long way from here.

これほど借金が積み重なるのは、未踏の領域で、どうなるかわからない、という不安があるわけだね。