OUR INSUFFICIENT DEBT IS THE GREATEST THREAT TO THE GLOBAL ECONOMY:

Our BlackRock Sovereign Risk Index (BSRI)--a framework for assessing sovereign risk across 50 countries--shows a recovery in the United States' sovereign risk profile over the past four years. The U.S.'s "Fiscal Space" score component--our measure of fiscal sustainability--has flipped to a sizable positive from a drag, and the country's overall ranking has gradually improved. See the chart below.

This improvement is a product of lower spending, an apparent slowdown in health care cost increases in recent years, low interest rates reducing debt servicing costs and steady, if historically subdued, economic growth. It means the U.S. economy appears to be in much stronger shape than it was during the last presidential election campaign of 2012, and we expect fiscal policy to become less of an economic drag going forward over the near term.

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