From the Magnificent Seven to the Desperate Hundred – Michael Roberts
“Mainstream economists and media make much of rising public sector debt and the costs of servicing that debt. In the US, the cost to the budget will reach $1trn and exceed spending on public services outside of social security and Medicare. The demand is that public sector must reduce its debt through higher taxes and more public spending cuts. That’s a bleak prospect for American households.
“But for the health of capitalist investment and production, it is the level of non-financial business debt that matters, not the public debt. US non-financial business debt is near all-time highs…
“Goldman Sachs economists estimate that $790 billion of US corporate debt is set to mature in 2024, followed by $1.07 trillion of debt maturing in 2025. That amounts to $1.8 trillion of debt reaching maturity within the next two years. The average interest rate on corporate debt will likely rise to 4.3% in 2024 and 4.5% in 2025.
“And talking of rising debt, the real crisis right now is among the countries of the Global South. Over $15 trillion was added to the global debt mountain last year, bringing the total to a new record high of $313 trillion, up from $210trn just a decade ago.”