The global debt is currently around $60,244,106,843,495, and according to the CIA’s World Factbook, there are only two countries, Liechtenstein and Macau, that don’t owe any sovereign external debt. Both countries are fairly small, and are both resource rich, thus helping each sustain a steady flow of cash into their economies. Macau is a semiautonomous region of China, and is home to the world’s largest casinos. Lichtenstein is one of the smallest European countries, and is the largest manufacturer of fake teeth and sausage casings. Both countries don’t use their own currencies, with Lichtenstein using the Swiss franc and Macau using the Hong Kong dollar, so their governments are unable to print more currency and utilize inflationary financial policy.
Some countries have relatively low official government debt, but enormous amounts in the “private sector”, while others have large amounts of government debt that are 100% or more of the GDP. In Japan, public debt as a percentage of GDP reached 246% in early 2016, while private sector debt has dropped by 55%. In terms of an impact on the economy, GDP only grew by .25%, probably because government debt crowded private credit.
After a 16 year civil war ended in 1992, Mozambique began to grow economically and attracted investors to fund its infrastructure on the idea that offshore gas would continue to bolster its economic growth. It was recently discovered that the country has over a billion U.S. dollars in undisclosed government debt, leading donor governments and other institutions to end their support. Currently, donors provide around 9 percent of the GDP annually through grants and loans. Fitch ratings downgraded the country’s long term foreign and local currency issuer default ratings, and according to Fitch, 88 percent of the total debt is foreign currency denominated. Moody’s, another rating agency, stated that the suspension of financial assistance is a negative credit risk.
Historically, austerity, increased private sector savings, structural reforms, and currency devaluations have worked to solve debt crises in the past. High debt levels after the Great Depression were thought to be reduced mainly due to the increase in private sector savings from 1942 - 1945 due to war rationing programs. The increased income from exports and savings contributed to the debt being reduced, allowing for the economy to recover faster. A solution that was proposed was to resolve each debt crisis using proven methods from economic history, rather than using the Keynesian economic theory in every case, regardless of merit.