Core Viewpoint - The article discusses the increasing global macro leverage ratio, primarily driven by government borrowing, and its implications for economic growth and stability [2][3][6]. Group 1: Global Debt Trends - Since the 2008 financial crisis, global debt has risen significantly, with the debt-to-GDP ratio exceeding 350% today, up from around 320% before the pandemic [3]. - Government debt has increased at a faster rate than that of the private sector, with major economies surpassing post-World War II levels [3][6]. - The macro leverage ratio in developed countries is higher than in developing countries, indicating a trend where larger economies require more debt to grow [3][6]. Group 2: Government Borrowing Dynamics - Governments are more willing to increase leverage during economic downturns to stabilize the economy, contrasting with private sectors that typically reduce debt in such times [10]. - The U.S. government has seen its debt interest payments rise significantly, with projections indicating that interest payments will account for a substantial portion of federal revenue [46]. - Japan's government has maintained a high leverage ratio, but its economy has struggled with stagnation despite this [10][46]. Group 3: Fiscal Policy and Taxation - Tax reforms have led to a decline in corporate tax rates globally, with the average rate dropping from 46.8% in 1980 to 25.7% in 2023 [23]. - In the U.S., the tax burden has shifted, with corporate tax contributions decreasing while payroll taxes have increased, potentially exacerbating income inequality [25]. - China's government has implemented tax reductions to stimulate investment, resulting in a significant increase in government leverage [32]. Group 4: Social Spending and Aging Population - The U.S. faces rising mandatory spending due to an aging population, with social security and healthcare costs expected to continue increasing [34][36]. - China's fiscal support for social insurance has grown dramatically, with subsidies for social insurance funds increasing by 229% over ten years [37]. - The need for increased government spending to address pension shortfalls is becoming critical, with projections indicating a significant funding gap due to demographic changes [40]. Group 5: Recommendations for Fiscal Management - The article suggests enhancing the transparency of public debt and utilizing special bonds to manage hidden debts effectively [60]. - It emphasizes the importance of improving the efficiency of fiscal spending to stimulate economic growth and consumer demand [60]. - Recommendations include increasing investment in social services and infrastructure to support long-term economic stability and growth [61].