Seeds of the next debt crisis

Higher debt: The Federal Reserve building in Washington. In the US, the Fed estimates that corporate debt has risen from US$3.3 trillion before the global financial crisis to US$6.5 trillion at end-2019. — Reuters

II used to be that pushing public debt beyond 90% (of GDP) could hurt growth and increase the risk of crisis. Today, economists are not so sure.

In a world of ultra-low interest rates, governments around the world are piling-up on debt. Today, it is argued that so long as sovereign bond yields remain below economic growth rates, higher public debt levels may even be desirable. It’s like governments are able to issue debt without needing to pay for it later. The economy will take care of it.