Planet Money – Debt

From 2-27-2012:

Solutions for countries to get out of debt.

-Four traditional ways:  Forgiveness, Inflation, GDP growth, Default

-”Jubilee” loan forgiveness: ancient idea that loans should be forgiven in 50 years

 

-Debt to GDP ratio indicates a country’s solvency.  Debt to GDP ratio of 90 is high limit; Greece anticipated to get up to 160 debt to GDP ratio by 2020.  Not good.

-Private Equity firms:  buy companies; take out loans to bring those companies to profitability; PE firms put money down and use profits to pay off down payments.