Independent Thinking Will debt constrain Western foreign policy?
Oct 25, 2024
Join experts Olivia O’Sullivan, Director of the UK in the World program, and David Lubin, a Senior Research Fellow in Global Economy, who discuss how rising national debt is reshaping Western foreign policy. Patrick Wintour offers insights into the delicate balance of UK foreign funding, while Ranil Dissanayake tackles the implications of demographic shifts on global challenges. They explore the complex nature of debt sustainability and its consequences for international aid, emphasizing the urgent need for a coordinated financial strategy amid soaring debts.
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Debt Sustainability Analysis
- Analyzing debt sustainability is more art than science, varying by country.
- The US enjoys an "exorbitant privilege" by printing the global reserve currency.
Liz Truss and Market Reaction
- Liz Truss's spending pledges triggered a market reaction due to a lack of funding explanation.
- The US has more leeway for mistakes than the UK because the dollar isn't the pound.
Debt and Expectations
- Debt sustainability depends on expectations from both creditors and governments.
- Developing countries believe rich countries, like the UK, can offer more support.