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#291: How Much Debt Is Too Much?

#291: How Much Debt Is Too Much?

Planet Money vor 15 Jahren

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Say you're a country with a decent-size national debt. Everything's going fine: Investors are willing to lend you money at a low interest rate, andyou can pay your bills without too much trouble.
But then investors get nervous and start demanding higher interest rates. All of a sudden, you have to devote more and more of your money just to pay off your debt.Your economy starts to falter, and investors demand still higher interest rates. Now you're really in trouble.What causes this to happen? Is there some magic threshold that countries cross before they get into trouble?On today's Planet Money, we put that question to Ken Rogoff — a Harvard economist and an expert on the history of sovereign debt crises. We talk to Rogoff about three countries in particular: Greece, Italy and the U.S.