Joy of Charts

The Big Picture

We are in a credit crunch, so Western government need to reduce the mountain of debt that caused it – gradually – rather than add to it.

When it comes to sovereign debt, Morgan Stanley points out that it’s not GDP, but whether the governments have the revenues to service their debt that matters. National debts are therefore better scaled against the maximum level of revenues that governments can realistically obtain from using their tax-raising power to the full.