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Quoted By: >>1228016
As U.S. Debt Surges, Europe Brings Its Own Under Control
https://www.wsj.com/economy/global/as-u-s-debt-surges-europe-brings-its-own-under-control-2ea6e58b
Throughout the Covid-19 pandemic and then Russia’s invasion of Ukraine, both the U.S. and Europe borrowed heavily. Now with those emergencies in the rear-view mirror, a divergence has emerged: Even as the U.S. continues to let deficits rip, Europe’s are on track to narrow significantly.
This is in contrast to a decade ago, when deficits in the wake of the global financial crisis pushed some members of the euro area to the brink of default. The lessons of that episode, coupled with eurozone rules, have served to impose discipline on European governments that for now is entirely absent in the U.S.
They are getting little credit for it. Government bond yields have risen worldwide in the past month. While many factors are at play, including efforts by central banks to bring inflation back down, another key factor is the U.S. deficit.
The U.S. government Friday said its deficit rose to $1.78 trillion, or 6.3% of gross domestic product, in the year ended Sept. 30, from $1.4 trillion, or 5.4% of GDP, a year earlier. Without an accounting change related to the administration’s aborted student-loan-cancellation program, the deficit would have been closer to $2 trillion, a doubling from the prior year.
https://www.wsj.com/economy/global/as-u-s-debt-surges-europe-brings-its-own-under-control-2ea6e58b
Throughout the Covid-19 pandemic and then Russia’s invasion of Ukraine, both the U.S. and Europe borrowed heavily. Now with those emergencies in the rear-view mirror, a divergence has emerged: Even as the U.S. continues to let deficits rip, Europe’s are on track to narrow significantly.
This is in contrast to a decade ago, when deficits in the wake of the global financial crisis pushed some members of the euro area to the brink of default. The lessons of that episode, coupled with eurozone rules, have served to impose discipline on European governments that for now is entirely absent in the U.S.
They are getting little credit for it. Government bond yields have risen worldwide in the past month. While many factors are at play, including efforts by central banks to bring inflation back down, another key factor is the U.S. deficit.
The U.S. government Friday said its deficit rose to $1.78 trillion, or 6.3% of gross domestic product, in the year ended Sept. 30, from $1.4 trillion, or 5.4% of GDP, a year earlier. Without an accounting change related to the administration’s aborted student-loan-cancellation program, the deficit would have been closer to $2 trillion, a doubling from the prior year.
