By VINCENT NDEGE MAOSA More by this Author The International Monetary Fund recommends to the developing countries that the total public debt as a percentage of the gross domestic product (GDP) should not exceed 40 per cent. From a record low of 38.20 per cent in 2012, a year before the current Jubilee regime, this ratio surged to a 62.3 per cent high last June.INVEST PRUDENTLYEconomists warn of a crisis.High level of debt diminishes government expenditure on essential services such as healthcare, education and other social empowerment programmes as a huge chunk of the revenue generated internally is channelled to debt servicing.Public debt per se is not harmful if the borrowed funds are invested prudently in development projects that will accelerate economic growth, promote stability and alleviate poverty. In fact, governments mobilise resources for economic development through public debt. In the United States, public debt-to-GDP was 105.5 per cent as at last September. US citizens, banks, corporations and the Federal Reserve Bank own approximately two thirds of the debt in form of securities, including Treasury bills, notes and bonds with the rest held by foreign countries, especially China and Japan.The federal government uses borrowed funds to pay for defence equipment,… Read full this story
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