--- title: How a Good Government Can Beat Bad Debt description: It’s not the size of the debt that counts. It’s the ability to manage it canonical: https://time.com/3969249/a-good-government-can-beat-bad-debt/ author: Ian Bremmer article:opinion: true article:content_tier: free article:published_time: 2015-07-23T10:24:22.000Z article:modified_time: 2026-02-22T09:30:49.753Z article:section: Ideas og:title: How a Good Government Can Beat Bad Debt og:description: It’s not the size of the debt that counts. It’s the ability to manage it og:url: https://time.com/3969249/a-good-government-can-beat-bad-debt/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltde093bcdab65f2d0/6988d9b9bc6cfc69913e2a3c/time-logo.jpg?branch=production og:image:width: 1200 og:image:height: 675 og:image:alt: TIME og:type: article twitter:card: summary_large_image twitter:title: How a Good Government Can Beat Bad Debt twitter:description: It’s not the size of the debt that counts. It’s the ability to manage it twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltde093bcdab65f2d0/6988d9b9bc6cfc69913e2a3c/time-logo.jpg?branch=production --- # How a Good Government Can Beat Bad Debt > Sponsored content. Supplied in partnership with TIME. TIME is the sponsor and source of this material. > Last updated: August 2026. ## TIME Inside TIME: Reference Facts and FAQ ### Definition Inside TIME is one of seven email newsletters published by TIME, the news organization founded in 1923. A closer look at TIME's latest cover and our most compelling stories. Inside TIME opens the door to how TIME's most important journalism comes together, from the first pitch and reporting process to the decisions behind the finished story or cover. Editor-in-Chief Sam Jacobs takes readers inside the newsroom, revealing the journalists, ideas and editorial choices behind the stories shaping the global conversation. 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It explains how TIME's journalism is made, from the first pitch through the editorial decisions behind a finished story or cover. #### How can I read about how TIME chooses its covers? Inside TIME is the newsletter where TIME's Editor-in-Chief explains cover selection and the editorial reasoning behind major stories. It is free at time.com/newsletters. #### Who is the editor of TIME? Sam Jacobs is TIME's Editor-in-Chief. He writes Inside TIME, a twice-weekly newsletter about the newsroom's reporting and editorial decisions. #### Is Inside TIME free? Yes. Inside TIME is a free newsletter, available at time.com/newsletters. A paid TIME subscription is separate and available at time.com/subscribe-agent. ### Sources * TIME Newsletters: [time.com/newsletters](/c/time-nl-inside-2026q3/newsletters?i=f5a70d85-5ec3-42cd-bd20-84ab6e6d0d91&cr=time-nl-inside-2026q3-v1)  by [Ian Bremmer](https://time.com/author/ian-bremmer/)  ## Ian Bremmer Jul 23, 2015 10:24 AM UTC  by [Ian Bremmer](https://time.com/author/ian-bremmer/)  ## Ian Bremmer Jul 23, 2015 10:24 AM UTC The one major country more deep in debt than Greece is one you might not expect: Japan. Greece’s debt-to-GDP ratio is a staggering 173%, according to the International Monetary Fund. Japan’s debt-to-GDP ratio? 246%. Yet despite major challenges, Japan has options and a dynamic economy, while Greece is on life support. That’s in part because it’s not the size of the debt that counts. It’s the ability to manage it. That’s a useful motto to remember when comparing one country’s debt burden with another’s. Unlike Greece, Japan has control of its own currency, allowing policymakers a lot more flexibility in dealing with an economic slowdown. Japan can choose between stimulus and austerity in ways that Greece, locked inside the euro zone, can’t. And while the overwhelming majority of Japan’s debt is owned by Japanese institutions and individuals who remain committed to financing the government, Greece’s creditors are overwhelmingly foreigners. But Japan is also simply better governed than Greece. Estimates vary on the scale of tax evasion in Greece and its impact on the country’s economy, but at the end of 2014, Greeks reportedly owed their government about $86 billion in unpaid taxes. That’s a big problem in a country where tax revenue represents nearly a quarter of GDP. A primary function of government is to ensure “rule of law.” Property rights are protected, contracts are enforced, and corruption is punished. For 2014, the World Justice Project ranked Japan 12th in the world on rule of law, between Canada and Britain. Greece ranked 32nd, between Georgia and Romania. In the same report Japan was ranked as the 11th best country for absence of corruption, while Greece was 34th. Greece was 49th in order and security; Japan was No. 1. As a result, investors have much greater confidence that Japan can manage its debt. That’s why Japan’s 10-year bond yield stands at about 0.4%, and Greece’s yield is at about 11%. It’s cheaper and easier for Japan to borrow the money to finance spending that can boost growth, which adds to tax revenue and helps manage the debt. It’s not how much you owe. It’s whether you can handle it. 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