Fiscal deficits must be cut to reduce debt levels.

In Lebanon, persisting high levels of public debt forced the Government to direct much of its expenditure towards debt service.

In March, household debt levels reached a record high of 44 of income.

Private and public debt levels are high and possibly unsustainable.

They could contrast their high growth rates with Europe s high levels of debt.

First, they will not be weighed down by high levels of public debt.

The country is also burdened with high levels of debt and limited resources.

This continued until 2007 2008, when Spanish debt levels became excessive.

But domestic savings remain low in the face of persistently high levels of public debt.

Now China is experiencing a fourth instance of elevated debt risk, this time characterized by high levels of accumulated local government and corporate debt.

But the debate about austerity and the cost of high public debt levels misses a key point Public debt owed to foreigners is different from debt owed to residents.

Worse still, high levels of public debt, like high taxes, cause serious problems for economic performance.

In 2012, French government debt levels reached 1.8 trillion euros, the equivalent of 90 of French GDP.

And large deficits and high debt levels decrease the prospects for a long boom.

Banks have less debt relative to their equity levels than they had in 2007.

And, to stabilize debt GDP ratios, the denominator must start rising otherwise, debt levels will become unsustainable, despite all efforts to reduce deficits.

Such profligacy has led to levels of debt that will become unsustainable if we do not act.

America, too, will manage to muddle through again leaving even higher levels of debt for the future.

Reinhart and Rogoff s research broadly shows that GDP growth is slower at high levels of public debt.

Much is being made of high levels of sovereign debt on both sides of the Atlantic, and in Japan.

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

In Europe, the market for Greek debt has frozen, and interest rate spreads between Irish and German euro denominated debt recently reached alarming levels.

Fiscal austerity helped to reverse the rising trend in public debt, and then reduced it to more manageable levels (debt nonetheless remains comparatively high).

This finding reflected the massive overweighting of one country in their sample, and there was the same confusion between correlation and causation seen in Alesina s work high debt levels may cause a lack of growth, or a lack of growth may cause high debt levels.

Five years on, public, private, and external debt are at record levels in many countries.

That is why countries build up debt levels that put them in the danger zone.

In Iraq, excessive external debt levels and massive war reparations are major obstacles to reconstruction.

With governments around the world (including Germany s) accumulating unprecedented levels of peacetime debt, markets are worrying about sustainability.

In some countries with high levels of debt and impaired growth, fiscal stimulus could raise the risk premium on sovereign debt and be counterproductive others have more flexibility.

Moreover, private and public sector debt levels tend to be much lower in the emerging economies.

Unemployment rates and budget deficits are higher, and public debt GDP ratios are at record levels.

First, high levels of debt will limit both welfare benefits and future governments ability to swap favors for votes.

Higher incomes would boost US savings, reducing households dependence on debt, even as they maintained consumption levels.

A long term alternative requires some capacity to write down debt where it has reached excessive levels.

Moreover, the IMF s share in crisis countries total external debt has reached unprecedented and systemically problematic levels.

Still, fiscal conditions in the advanced economies remain unsustainable, with many OECD members debt levels hovering around 100 of GDP.

In Brazil, the consequences of those crises were an inflationary spiral and an increase in foreign debt to stratospheric levels.

Efforts should be made to strengthen the capacity of developing countries to manage their debt, because growth, human development and the achievement of the Millennium Development Goals depended on maintaining sustainable debt levels.

The average high debt episodes since 1800 last 23 years and are associated with a growth rate more than one percentage point below the rate typical for periods of lower debt levels.

Private leverage levels, as much as the public debt burden, must therefore be treated as crucial economic variables.

But Portugal s debt levels are still highly problematic by historical benchmarks (based on my research with Carmen Reinhart).

The effect is greater when modest deficit and debt levels are exceeded and current account deficits are large.

Latin America s low personal debt levels have created an opportunity to build a constructive culture of borrowing while expanding economic opportunity.

Neither the fiscal budgets in the Maghreb nor existing levels of debt currently allows the necessary public investments to be made.

The more diversified economies, in contrast, face larger public debt burdens and much greater challenges in maintaining sustainable levels of indebtedness.