Debt At $40 Trillion: Morgan Stanley Asks Will It "Brake" Or "Break" The Economy?

By Andrew Sheets, Global Head of Fixed Income Research at Morgan Stanley

$40T of Debt: Brake or Break?

Early in the last decade it was all people could talk about. On the heels of the GFC and the response required to contain it, markets turned their attention to the threat of government debt. Research reports, TV and conferences abounded with charts of rising debt/GDP and stern warnings of the consequences. It was the issue that would shape our financial future, and what a bleak future it was: high debt, low growth, and grinding austerity as far as the eye could see.