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Planet Money

Is this how the great international borrowing spree ends?

October 31, 2026 • 25m

Summary

⏱️ 11 min read

Overview

Planet Money examines the growing debt crisis facing wealthy nations, with France emerging as a critical case study. As rich countries have been on an unprecedented borrowing spree for over a decade, investors are increasingly worried about France's ability to repay its debts. The episode explores how interest rates, political dysfunction, and market confidence determine which countries can sustain high debt levels, and what the U.S. and other nations might learn from France's predicament.

The Global Debt Spree: A New Normal

Over the past decade and a half, wealthy nations including the U.S., UK, Italy, France, and Canada have accumulated record amounts of debt. What would have been unthinkable just a generation ago has become the norm, with many countries far exceeding the once-sacred 60% debt-to-GDP ratio. The big question economists are grappling with is determining how much debt is too much, and France has become the test case everyone is watching closely.

  • Rich countries have been racking up record debt over the past 15 years, far beyond historical norms
  • Canada now owes more than a trillion dollars in debt after decades of heavy spending
  • The 1990s rule was that debt shouldn't exceed 60% of GDP; many countries now far exceed this
  • The UK is at 102% debt-to-GDP, the U.S. at 126%, and Italy at 137%
" Not since World War II have we ever seen so many rich countries borrow so much money for such a long period of time. "

France's Debt Crisis: When Investors Lose Faith

France has become ground zero for debt concerns as investors increasingly worry the government cannot pay back its obligations. Despite having less debt than countries like Italy and Greece, France faces higher interest rates because investors doubt its political will to address the problem. The situation reveals how market sentiment and political credibility matter as much as raw numbers when it comes to sovereign debt.

  • Investors are forcing France to pay higher interest rates due to concerns about repayment
  • France is running a huge budget deficit with an aging population, rising healthcare costs, and expensive pension programs
  • French interest rates on 10-year bonds spiked from 3% to almost 5%, the highest since the 2000s
  • France now pays higher interest rates than Italy and even Greece, despite having lower debt
" You know, who's going to be the first to jump in the water? "

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