The Burden Of Public Debt And Its Negative Effect On Private Investment

From Federal Reserve Bank Of Cleveland, Economic Trends, "The Burden of Public Debt" by Owen F. Humpage and Margaret Jacobson:

The overall public-debt burden of the world’s most advanced countries is approaching levels not seen since the Second World War—levels that could damage their future growth prospects. According to International Monetary Fund (IMF) estimates (here and here), the average ratio of public debt to GDP among the advanced economies—their debt burden—will approach 111 percent this year, but then rise significantly above that percentage at least through 2017. The United States’ public debt level is headed for the wrong side of that average. After breaching 107 percent of GDP this year, the U.S. public-debt burden will settle at 114 percent after 2015, according to the IMF’s best guess. While much of the debt buildup stemmed from the ongoing global economic malaise, contingent liabilities associated with aging populations will keep pressure on many advanced countries’ budgets. The outlook is still cloudy, but this much seems clear: To the extent that public debts absorb private savings that otherwise would support private investment, long-term economic growth will suffer. [Emphasis added.]

Source: Federal Reserve Bank Of Cleveland