If foreign debt matters more than public debt, the key variable requiring adjustment is the external deficit, not the fiscal deficit.

Of course, that makes the budget deficit larger and keeps debt growing fast.

By running a deficit, a country increases its national debt and imposes burdens on future generations.

At the onset of its crisis, Argentina s budget deficit, public debt, and current account deficit (as a share of GDP) were about 3 , 50 and 2 , respectively.

First, different countries have different capacities to sustain public debt, depending on their initial deficit levels, existing debt burden, payment history, and policy credibility.

If GDP falls, achieving a certain deficit and debt target (as a share of GDP) becomes impossible.

The difference between the overall deficit and the primary deficit implies that the interest on the Greek national debt this year will be 4.1 of GDP.

Thus, an economic policy that tackles America s debt and deficit makes up the main portion of the Strategy.

And it will make it even harder to find a medium term solution to America s worsening public debt and deficit dynamics.

For an American, there is a certain amusement in Australian worries about the deficit and debt their deficit as a percentage of GDP is less than half that of the US their gross national debt is less than a third.

If foreign debt matters more than public debt, the key variable requiring adjustment is the external deficit, not the fiscal deficit. A country that has a balanced current account does not need any additional foreign capital.

If GDP falls, achieving a certain deficit and debt target (as a share of GDP) becomes impossible. This, indeed, was the debt death trap that engulfed Argentina between 1998 and 2001.

With the current account deficit now exceeding 5 of GDP, US foreign debt is rising fast.

So, how should the US economy s jobs deficit, investment deficit, and long run fiscal deficit be addressed?

Instead, they focused exclusively on US foreign debt, ignoring household debt (mortgage and consumer debt), public debt, business debt, and financial debt.

BERKELEY The United States is beset by four deficits a fiscal deficit, a jobs deficit, a deficit in public investment, and an opportunity deficit.

Moreover, France s rapidly worsening foreign trade deficit is boosting already excessive debt levels, while output is falling and unemployment is rising.

The fiscal deficit widened to 10 of GDP, causing government debt (including external debt), which had been falling steadily, to rise to 76 of GDP.

Even an economy with an overall budget deficit will have a declining government debt GDP ratio if the growth rate of its nominal GDP exceeds that of its debt. For Greece, with an overall deficit of 4.1 of GDP and a debt GDP ratio of 170 , the debt ratio would fall if the combination of inflation and real (inflation adjusted) GDP growth exceeded 2.4 .

Deficit fetishism never makes sense the national debt is only one side of a country s balance sheet.

But Ireland, with previously modest deficit and debt levels, also suddenly and unexpectedly faces the same kind of issue, owing to the government s need to take over private debt from the banking sector.

But Ireland, with previously modest deficit and debt levels, also suddenly and unexpectedly faces the same kind of issue, owing to the government s need to take over private debt from the banking sector.

This deficit reflects an underlying research deficit.

At nearly 10 of GDP, the deficit is resulting in a mountain of debt that threatens America s future.

Deficit fetishism never makes sense 160 the national debt is only one side of a country s balance sheet.

For Greece, with an overall deficit of 4.1 of GDP and a debt GDP ratio of 170 , the debt ratio would fall if the combination of inflation and real (inflation adjusted) GDP growth exceeded 2.4 .

Debt and Delusion

Eurozone members as a whole, they argue, have a lower budget deficit than the US and the United Kingdom, and a similar level of public debt.

The magic trifecta of sustainable debt and deficit ratios, a real depreciation, and restoration of growth looks unlikely to be achievable even with official financial support.

The German model for resolving the debt crisis and returning to internal or external balance relies on fiscal consolidation and structural reforms for the deficit countries.

The counterargument hinges on the difference between the current account deficit and the trade deficit.

Coming so shortly on the heels of the subprime crisis, the debate over the debt ceiling and the budget deficit is the last straw.

In fact, there is no simple relationship between the size of a government s deficit or debt and the interest rate that it must pay.

Investors need to be reassured that debt service costs are under control, and that debt volumes and deficit limits are firmly monitored in order to minimize default risks and strengthen banks ability to lay the groundwork for sustainable growth.

Even an economy with an overall budget deficit will have a declining government debt GDP ratio if the growth rate of its nominal GDP exceeds that of its debt.

Unemployment and the budget deficit are soaring.

More debt relief encompassing more countries and more debt (including bilateral debt) is needed.

More debt relief encompassing more countries and more debt (including bilateral debt) is needed.

Even if this widens the deficit in the short run, it will reduce the national debt in the long run.

Ireland, the European country with the highest rate of growth is also the one that most reduced its deficit and public debt by cutting expenditures and taxes.

That restructuring will occur, deficit spending or no deficit spending.

Austerity and Debt Realism

Debt and America s Decline

This is forcing deficit countries into real exchange rate adjustments via deflation and thus a rising burden of public and private debt that may lead to disorderly defaults.

Europe s Vision Deficit