Publication

This report provides background information on sovereign debt. It examines the shift of concerns over sovereign debt sustainability from emerging markets in the 1990s and 2000s to advanced economies following the global financial crisis of 2008-2009, and then analyzes the different policy options governments have for lowering debt levels. It also discusses the current strategy being used by most advanced economies—fiscal austerity—and concerns that have been raised about its global impact. Finally, the report analyzes issues of particular interest to Congress, including comparisons between US and European debt levels, how efforts to reduce debt levels could impact the US economy, and policy options available to Congress for engaging on this issue.