Government Spending Spree Drives Global Debt to $100 Trillion

However bad your spending
habits may be, chances are it’s better than that of the average
national government. The political class around the world has been
running the credit cards up with such glee, you have to wonder how
officials plan to pay the loans back (that’s rhetorical—of
course they don’t plan to pay them back). Riding a tide of
government borrowing, global debt markets rose to $100 trillion in
mid 2013 from a mere $70 trillion in 2007. Wait. $100
trillion? Yup.

According to the Bank for
International Settlements, which basically acts as a bank for
central banks:

Global debt markets have grown to an estimated $100 trillion (in
amounts outstanding) in mid-2013 (Graph C, left-hand panel), up
from $70 trillion in mid-2007. Growth has been uneven across the
main market segments. Active issuance by governments and
non-financial corporations has lifted the share of domestically
issued bonds, whereas more restrained activity by financial
institutions has held back international issuance (Graph C,
left-hand panel).

Not surprisingly, given the significant expansion in government
spending in recent years, governments (including central, state and
local governments) have been the largest debt issuers (Graph C,
left-hand panel).

Graph C is below, and it shows that global debt is soaring and
poised to achieve orbit.

The United States government’s official national debt
is currently $17.5 trillion. Peter Suderman
recently pointed out that the proposed White House budget would
leave us with a debt that’s $8.3 trillion higher than it is now
over the next decade.

So the next time somebody starts talking about “austerity,” you
can explain just how austere the past few years have been for poor,
strapped governments.