K-12 Tax & Spending Climate: How Governments Can Avoid a Debt Crisis as Rates Rise

Justin Lahart and Jon Sindreu:

At the end of 2011, the U.S. public sector had $15 trillion in debt, according to the Organization for Economic Cooperation and Development, equal to 99% of gross domestic product, a post-World War II record. By last year it had swelled to $30 trillion, or 131% of GDP. In Japan, anemic growth has pushed public debt to a whopping 242% of GDP. In Europe, Britain’s debt load is 156%, and Italy’s is 183%.

Yet the amount of money required to pay interest on this massive pile has fallen across the board. In the U.S., it went from 4.4% of GDP in 2011 to only 3.6% a decade later. Subtracting some types of interest that the government receives, the net figure is an even smaller 2.5% of GDP.