Recent headlines seem to augur a global debt crisis. The US is teetering on the precipice of a self-inflicted default. Egypt, Ghana, Pakistan, and other countries face grave financial difficulties. And the Chinese are delaying or hampering multilateral efforts to restructure low- and middle-income countries' debt.
The International Monetary Fund counts 41 countries as being heavily indebted, and that does not include middle-income countries such as Argentina, Pakistan, and Sri Lanka.
The concerns these stories have fueled are real, but there are fundamental differences between them. The US can service its debts, and it has been a reliable borrower for many years. Its problem is political. By contrast, the question for poorer countries is whether or how much they can repay.
