The U.S. stands out from other developed countries when it comes to the cost of its government debt. Bloomberg’s Justin Fox says that the interest burden of government debt is both larger in the U.S. than in similar countries and moving in a different direction – that is, up.
According to a forecast by the 36-member Organization for Economic Cooperation and Development, the interest cost of all government debt in the U.S. (including federal, state and local) will equal about 3% of GDP in 2019. “Aside from the U.S., [the OECD] has only two members with higher projected net interest spending for 2019: Greece and Italy, at 3.6% and 3.5% of GDP, respectively,” Fox writes. “These are both countries beset by perennial worries about the sustainability of their government debt.”
While the numbers alone don’t necessarily tell us how risky U.S. fiscal policy has been, they do make clear that the country is something of a “historical outlier,” Fox says.