G7 Debt Crisis Threatens Global Financial Stability
Debt levels across G7 nations have surpassed annual GDP, creating systemic risks that could derail economic progress. The United States, Britain, France, Italy and Japan now carry unprecedented liabilities—a dangerous position when unemployment remains low and growth appears stable. Harvard economist Kenneth Rogoff warns this leaves governments without fiscal ammunition: "You want to be able to spend big and spend fast when you need to."
The debt spiral began with 2008 crisis measures but continues during prosperity. Rising borrowing costs now consume larger tax revenue shares, spilling over into business loans, mortgages and consumer credit. At Davos, finance ministers privately grappled with funding crises as political attention focused elsewhere.
