All around the world, economic growth has slowed while government debt has ballooned to unsustainably high levels. In the US, for example, debt is expected to increase to more than 114% of gross domestic product (GDP) by 2017, according to the International Monetary Fund. This exceeds the critical debt-to-GDP threshold of 90%, above which debt appears to create a significant drag on growth.
To reduce their debt levels, governments have historically had four options to choose from—but not all of them are viable today:
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