Government debt in Australia is well below average – but the number is deceptive | Satyajit Das

Borrowing funds services and keeps taxes low, but true prosperity cannot be built on excessive cheap credit

Economics in Australia is frequently reduced to debates around government debt. Claims and counterclaims about profligacy and borrowings overlook several issues.

First, the current scale of the debt is unprecedented outside of wars. At the end of 2021, global debt was US$295tn - 350% of everything the world produces in a year, compared with 282% in 2008. The major increase is in government debt, which has reached a record 99% of global output. US, eurozone and Japanese government debt is now at 103%, 98% and 257% of output respectively.