Constraints for rich nations: OECD

WASHINGTON: Leading rich nations will have limited scope to cut taxes or increase government spending to boost their economies because of their public debt levels, the head of the Organisation for Economic Cooperation and Development (OECD) said. The US has significantly increased its debt through measures to combat the financial crisis this year and Japan borrowed extensively during the 1980s and 1990s when it faced its own banking crisis.

“Long-term fiscal sustainability is becoming an important issue with the US public debt set to rise to internationally high levels,” said the head of the OECD, Angel Gurria.