Sovereign Debt in Advanced Economies:  Overview and Issues for Congress, Rebecca M. Nelson – Analyst in International Trade and Finance. October 28, 2013

“High levels of sovereign debt in advanced economies are of interest to Congress for a number of reasons. First, the IMF has identified advanced economy debt as a possible threat to the global economic recovery, as countries struggle to find a balance between growth and debt management in an uncertain global economic recovery. Second, Congress has and continues to debate a number of fiscal issues, particularly in the context of federal budget and the debt ceiling. In many of these fiscal debates, parallels are drawn between the United States and other advanced economies, such as Greece, Ireland, and the United Kingdom. Analyzing debt levels and factors  that shape debt sustainability can help inform these comparisons. Third, how other countries reduce their debt impacts the U.S. economy. Most advanced economies are implementing fiscal austerity programs to lower their debt levels. Simultaneous austerity programs in the advanced  countries, the United States’ major trading partners, could depress demand for U.S. exports abroad, as well as deter investment in and from advanced economies.”