The world is drowning in debt: Global borrowings hit a record high of over $324 trillion in the first quarter of this year, jumping by around $7.5 trillion in those first three months alone.<\/p>\n
We\u2019ve become so accustomed to the idea of excessive borrowing to cover excessive expenditure that we\u2019ve lost sight of just how unsustainable the level of both private and public spending is: and we\u2019ve also lost sight of the fact that debt must be repaid.<\/p>\n
That might be because global debt now involves bewilderingly large sums of money. Are we even cognisant that every trillion borrowed is a million million dollars, and the Gross Domestic Product of the entire world in 2024 \u2013 coming in at \u20ac111 Trillion according to the World Bank \u2013\u00a0 was less than one third of total global borrowing?<\/p>\n
Global public debt \u2013 the amount to which nations are indebted \u2013\u00a0 continues to soar, and hit \u20ac103 Trillion by the end of 2024. The alarming trend is captured in this graphic from United Nations Conference on Trade and Development which shows that public debt doubled in just 15 years, with debt of emerging countries \u2013 especially in Asia \u2013 rising fast, while developed economies continue to become more and more indebted, mostly due to ever-accelerating government spending.<\/p>\n
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In what are now called emerging countries, that increased debt intake comes with a heavy cost as they are far more likely to pay crippling interest rates, in some cases being then forced to divert funds from essential services to cover debt repayment and interest costs.<\/p>\n
But developed economies are also ridiculously indebted. As shown above, the Covid lockdowns saw public debt leap 15%, and that was followed by a sustained period of higher interest rates after years of cheap loans and low yields on government bonds. Yet governments, including our own, kept spending like there is no tomorrow. In fact, the lavish spending during Covid \u2013 to effectively try to compensate for the absurd length of time that the economy, and everything else, was placed on pause \u2013\u00a0 seems to have lowered the bar when it came to fiscal prudence, with Irish public spending up 50% since before the Covid panic, a pattern also seen elsewhere.<\/p>\n
We\u2019ve felt cushioned from the obvious effects of increasing spending beyond our actual means by the corporation tax from multinationals which has filled our coffers until now \u2013 relying on the precarious position where just ten firms account for about \u20ac1 in every \u20ac8 of all tax revenue. The writing is on the wall, however, in regard to that particular income source, and, as I have written previously<\/a>,\u00a0 the Irish Fiscal Advisory Council has shown that, without the now-unreliable corporation tax from global corporations here for tax purposes, the country\u2019s finances are running at a huge deficit each year.<\/p>\n We are not alone in that. The sovereign debt of the United States, reached a staggering $30.3 trillion at the end of the second quarter of 2025 is a result of persistent deficits \u2013 when the government spends more in a year than it receives in revenue. As goes the U.S., goes the world:\u00a0 and out of control spending under successive administrations means that, as with the global situation, the nation\u2019s debt previously matched and has now overtaken<\/a> the entire U.S. economy.<\/p>\n Gross domestic product (GDP), the sum of all goods and services produced by the U.S. economy, was $30.3 trillion at the end of the second quarter of 2025 (June 30), according to the latest estimate by the Bureau of Economic Analysis (BEA). That means the debt, which stood at $36.2 trillion at the end of the second quarter, was 119.4% of GDP.<\/p>\n The same story can be seen across Europe. In 2024, all EU member states, with the exception of 6 countries, reported a deficit \u2013 and in 12 countries the deficit was higher or equal to 3% of GDP, a threshold set by the Stability and Growth Pact (SGP) to ensure fiscal stability. Additionally, the overall debt of Eurozone countries is now dangerously close to the GDP of same, having grown significantly since 2000. The latest figures show that the Eurozone public debt to GDP ratio has significantly increased in that time, rising to 87.4% by the end of 2024.<\/p>\n