"Global debt exceeds $100 trillion as interest costs surge, OECD says"

That interest cost is the problem. Everyone knows that sovereign debt will never be repaid, just rolled for the next generation to deal with, but those current interest payments will really put a damper on the ongoing party.

Speaking of parties, the current "live for the moment" nihilistic zeitgeist brings to mind a comment by  Viktor Chernomyrdin, former head of Gazprom:

On the future: "We will live so well that our children and grandchildren will envy us!"  

And from Reuters March 20:

• OECD member govts' interest costs rise to 3.3% of GDP, surpassing defence spending
• OECD warns of refinancing risks for low-income, high-risk countries
• Geopolitical tensions may disrupt international portfolio flows, OECD cautions

Outstanding government and corporate bonds globally exceeded $100 trillion last year, the OECD said on Thursday, with rising interest costs leaving borrowers facing tough choices and needing to prioritise productive investments.

 

Between 2021 and 2024, interest costs as a share of output rose from the lowest to the highest in the last 20 years. Spending by governments on interest payments reached 3.3% of GDP in its member countries, higher than what they spend on defence, the Organisation for Economic Co-operation and Development said in a global debt report.

 

While central banks are cutting interest rates now, borrowing costs remain much higher than before 2022's rate hikes, so low-rate debt is continuing to be replaced and interest costs are likely to continue rising ahead.

 

That comes at a time when governments face big spending bills. Germany's parliament approved a massive plan to boost infrastructure and support a broader European defence spending push this week. Long-standing costs from the green transition to ageing populations loom for major economies.

"This combination of higher costs and higher debt risks restricting capacity for future borrowing at a time when investment needs are greater than ever," the Organisation for Economic Co-operation and Development said in its annual debt report.

 

Despite their sharp rise, interest costs are still below prevailing market rates for over half of OECD countries' and nearly a third of emerging market government debt, as well as for just under two thirds of high-grade corporate debt and for nearly three quarters of junk corporate debt, the report said.

Nearly half of the government debt of OECD countries and emerging markets and around a third of corporate debt will mature by 2027....

....MUCH MORE

 One more from Viktor:

On economic reform: "We meant to do better, but it came out as always"