Dicing with debt: a guide to government overspending

No country can function without debt. But with countries such as Greece and Italy continuing to give economists and politicians sleepless nights, swissinfo.ch explains the causes and potential consequences of being seriously in the red. Tax income alone is not enough to build roads, hospitals and schools, so nations issue bonds to borrow money from the financial markets. However, some economists fear the world is growing dependent on a growing mountain of debt – and it could end badly. The European Union considers the safe limit of state debt to be no more than 60% of a country’s annual economic output. But many countries have gone way over that limit. In fact non-EU Switzerland is one of few European countries under it, according to estimates by the International Monetary Fund (IMF). As shown below, the most-indebted countries are largely “rich” economies. As in real life, the more money you have, the more you can borrow. Also, rich countries are mostly ...