Buenos Aires Times: Global Debt May Increase Financial Risks
In Argentina, a Buenos Aires Times column expressed the view that the country may weather a possible global financial crisis thanks to President Javier Milei's policy of cutting public spending and developing natural resources. The author notes that Argentina's debt problems remain serious but considers them less complex than those of a number of major Western economies.
Public debt
The columnist notes that the U.S. national debt recently exceeded $40 trillion, or about 125% of annual GDP. According to his account, U.S. Treasury Secretary Scott Bessent did not attach particular significance to this threshold, calling $40 trillion a meaningless round number.
The article also cites estimates of public debt at 117% of annual output for France, about 95% for the United Kingdom, and nearly 250% for Japan. In the commentator's view, servicing such debts requires substantial funds and narrows governments' ability to finance social programs, defense, and other expenditures.
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The author refers to a principle formulated by American economist Herbert Stein in 1986: a process that cannot continue forever eventually stops. He believes that the governments of Western countries, as well as China, need to restrain public spending to avoid a harsher reaction from financial markets.
Investment in artificial intelligence
The author identifies major corporate investments in artificial intelligence as a separate risk. In his assessment, if the technology fails to meet high expectations, a large-scale speculative bubble could burst. According to the commentator, this could cause losses for small investors, worsen the financial position of technology corporations, and increase market instability.
The author compares the possible long-term consequences to the 2008 crisis, after which, in his words, unstable employment in the gig economy became the norm for many people.
