The subnational debt market in some developing countries has been going through a notable transformation. Private capital is emerging to play an important role and subnational bonds increasingly competing with traditional bank loans.
Is it students pinching pennies and eating more ramen, moving home after college and postponing marriage? Or should parents keep shortchanging their own retirement to give their kids a leg up? Neither.
Mirroring issues in the EU, a problem of debt cannot be solved by yet more debt. With the threat of a downgrade looming, any rise in interest rates could make the situation worse, hitting the tax payer and U.S. exporters.