October 20, 2015
Yep, it seems that China now has a gross debt equal to 43.2 percent of its GDP, according to the I.M.F. By comparison, the gross debt of the United States is over 104 percent. But, the NYT apparently thinks China has a big problem here.
This does matter, because insofar as the main problem with China’s economy is a lack of demand, it can be easily countered with additional government spending. Of course if the government were up against some sort of borrowing constraint due to an excessive debt burden, and inflationary concerns precluded the printing of money, then the route of deficit spending would not be available. However such constraints only appear to exist in the pages of the NYT, not in the real world.
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