The world is in debt to the tune of $315 trillion, and counting.
$315,000,000,000,000
$315 trillion or $315,000,000,000,000 is a daunting number, it’s massive. In 2024, the global GDP reached just $109.5 trillion, just over a third of the global debt figure.
Perspective
To provide some perspective, with the world population at roughly 8.1 billion, if the debt were distributed evenly, each person would shoulder about $39,000 in debt.
As global debt reaches unprecedented levels, concerns naturally arise about its implications and origins.
Global debt
Global debt includes borrowings by households, businesses, and governments.
Household debt
Household debt, which many are familiar with, comprises mortgages, credit cards, and student loans. At the beginning of 2024, it stood at $59.1 trillion.
Corporate debt
Corporate debt, utilized by businesses for operations and growth, reached $164.5 trillion, with the financial sector contributing $70.4 trillion.
Government debt
Government debt, on the other hand, finances public services and projects without raising taxes. It can be obtained from other nations or institutions like the World Bank and the IMF, or through bond sales, which are essentially promises to pay with interest from the state to investors.
Public debt
Public debt was reported to be $91.4 trillion. While often perceived negatively, debt can be advantageous, supporting individuals in education and homeownership, aiding business expansion, and providing governments with means for economic development, social expenditures, or crisis management.
History
Historical evidence shows that public debt has been around for at least 2000 years, mainly for establishing settlements and financing wars, with governments accruing significant debts from conflicts such as the Napoleonic Wars.
Debt engulfs us all and is here to stay, but at what cost to society?
And who do we owe?
