Economists: No Solution in Sight for Soaring Public Debt

Economists at the Kansas City Federal Reserve's annual central banking symposium in Jackson Hole, Wyoming, have concluded that the sharp rise in public debt loads over the past decade and a half is likely irreversible. Despite concerns about the growth-crimping implications of high debt, reducing debt-to-GDP ratios is unlikely in practice due to factors such as population aging, the need for public financing in areas like healthcare and pensions, rising interest rates, political divisions, and the broadening pool of creditors. Governments will have to live with high inherited debts and will need to implement spending limits, consider tax hikes, and improve bank regulation to manage the situation.