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How much debt is too much?

The 2008 global financial crisis was a dramatic demonstration that ill-considered debt causes major damage, affecting the entire global economy. If excessive national debt was the key problem around the world seven years ago, what has happened to debt levels since then? The short answer is that debt ratios, including private and public sector debt, have increased in all advanced economies, in some cases substantially. We do not seem to have fixed the problem. Are we heading for a repeat of the 2008 crisis?

     McKinsey Global Institute has put together the figures, hoping to distill the answer from international comparisons. Gross global debt has grown by $57 trillion since 2007, raising the ratio to gross domestic product from 269% to 286%. The aggregate figures disguise outliers: Japanese debt is over five times gross domestic product, and Spain's debt is fourfold.

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