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

The national debt has increased, with no offsetting asset placed on the government s balance sheet.

Countries can reduce their national debt by narrowing the budget deficit or achieving a primary surplus (the fiscal balance minus interest payments on outstanding debt).

Indeed, sovereigns are dumping a larger fraction of their public debt onto banks balance sheet, especially in the eurozone.

To do the same thing with bank debt could pull hitherto sound economies into the abyss, because bank s balance sheets are much larger than the volume of government debt.

An integrated asset liability structure is needed that also encompasses domestic debt and off balance sheet items.

This, in turn, would support fragile balance of payments positions throughout the region, potentially assisting with pervasive debt repayment problems.

Cleaning up high private sector debt and lowering public debt ratios by growth alone is particularly hard if a balance sheet crisis leads to an anemic recovery.

But China s total public debt, including off balance sheet local government financing vehicles, probably amounts to around 70 of GDP already.

This is needed to prevent even more private debt being put on government balance sheets, causing a fiscal blowout.

Its trade balance is positive, and total public debt is not as high as it is in other countries.

In Europe, every balance sheet available has been tapped to forestall a debt crisis in the periphery, resulting in large bailout packages for Greece, Ireland, and Portugal, and the contamination of the ECB s balance sheet.

The implicit guarantees on this debt, too, suggest that the government s liabilities are much higher than its balance sheet indicates.

These are highly leveraged businesses, typically funding their balance sheets with no more than 5 equity (and thus 95 debt).

The change in a country s debt burden reflects the size of its primary budget balance (the balance minus interest payments) as a share of GDP, as well as the difference between its borrowing costs and its GDP growth rate.

And this concentration of public debt on banks balance sheets is what makes the entire European banking system so vulnerable to a sovereign default.

(c) As the balance of payments deteriorated, especially after interruptions of capital inflows and sometimes massive flights of capital, the national currency was sharply devalued. This sharp devaluation increased further the cost of debt servicing and the debt to GDP ratio.

The most likely explanation for this public investment shortfall is fiscal constraints. And, indeed, debt and unfunded non debt liabilities increasingly weigh down public sector balance sheets and pension funds, eroding the foundations of resilient, sustainable growth.

The issue was not only the aggregate level of debt it was also a question of balance between private and public sector debt, their maturity structure, the level of contingent liabilities, reserve management and pursuit of macroeconomic policies consistent with development objectives.

Moreover, many banks had so much public debt on their balance sheets that they would have been bankrupted in the event of a full blown default.

Had the ECB known this at the start of Europe s debt crisis, it might have resisted taking so many risks with its balance sheet and reputation.

Trapped in the aftermath of a wrenching balance sheet recession, US families remain fixated on deleveraging paying down debt and rebuilding their income based saving balances.

Regarding the external balance of payments deficit, which stood at about 5 billion five years ago, we reduced our expenditures that was mainly on debt servicing.

Policies aimed directly at debt forgiveness and enhanced saving incentives contentious, to be sure would at least address zombie consumers balance sheet problems.

Without more fully restoring the health of financial and household balance sheets, a worsening of public debt sustainability could be transmitted back to banking system or across borders.

A lower price level would also increase the real value of business debt, weakening balance sheets and thus making it harder for companies to get additional credit.

A federal budget that achieves primary balance has federal revenues equaling spending but with a remaining budget deficit as a result of interest payments on past debt.

This rendered potentially insolvent commercial banks, whose balance sheets were loaded with such bonds, giving rise to Europe s twin sovereign debt and banking crisis.

Eurozone leaders must recognize that spending cuts will do nothing to stabilize the balance sheets of core country banks that are over exposed to peripheral countries sovereign debt.

In Ireland and Spain, transferring the banking system s huge losses to the government s balance sheet on top of already escalating public debt will eventually lead to sovereign insolvency.

This is because h ouseholds also have made some progress in repairing their balance sheets saving more, borrowing less, and reducing their burdens of interest payments and debt.

Eurozone leaders must recognize that spending cuts will do nothing to stabilize the balance sheets of core country banks that are over exposed to peripheral countries sovereign debt.

Once a vulnerable country's debts are cancelled, if an attempt is made to run it without balancing the balance sheet, debt could easily reconsume it.

The US national debt GDP ratio will be on track to fall from its current level of 75 to 50 by 2035. Moreover, the US will begin running primary budget surpluses the fiscal balance minus interest payments on existing debt by 2015.

It is not yet a hole of the type one finds in Greece, where restoring fiscal balance and reviving economic growth are probably impossible without a restructuring of public debt.

In business, in turning around a corporation that has collapsed, dealing with outstanding debt is only part of the problem, because that represents only one side of the balance sheet.

Governments, in order to contain the fallout of the crisis, ran up public debt, including in countries whose balance sheets had already been weakened significantly by declining GDP growth.

And a new fiscal compact foresees enshrining member states commitment to budget balance and to reducing public debt to within 60 of GDP in 20 years in their constitutions.

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.

When the bubbles burst, households understandably became fixated on balance sheet repair namely, paying down debt and rebuilding personal savings, rather than resuming excessive spending habits.

More are likely, because the global economy is out of balance in several respects as it emerges from the crisis, particularly in terms of sovereign debt and the structure of global demand.

Acknowledging that recent fiscal policies had put the US on an unsustainable trajectory of rising public debt, Obama said that moving towards budget balance was now essential for fiscal stability.

Now, with household debt sustained on a knife edge after feverish government intervention, the fiscal position has deteriorated dramatically and the current account balance has worsened again.

Before the recent Italian election, financial markets showed signs of optimism, encouraged by the European Central Bank s policy of guaranteeing eurozone members sovereign debt, expanding its balance sheet, and lowering interest rates.

The euro crisis is a complex mixture of banking and sovereign debt problems, as well as divergences in economic performance that have given rise to balance of payments imbalances within the eurozone.