How to Fill the Huge Public Debt Gap?

　　Western countries, led by the United States, are grappling with the ever-expanding government debt. A recent report from UBS warns that Western governments may increasingly turn their attention to the private wealth of the rich in the future to fill their fiscal gaps.

　　Paul Donovan, Chief Economist at UBS, noted that policymakers have previously used private wealth to cover government spending and may adopt a carrot-and-stick approach to raise funds from individuals in the future.

　　He explained that governments have long been trying to mobilize private wealth to support public finances. One method is to influence the market—for instance, by using incentives such as tax-free premium bonds to encourage individuals to buy government bonds, thereby directing private savings directly toward national finances.

　　In addition, he mentioned that prudent regulation, such as guiding pension funds to invest in domestic bonds, is another approach. The UK adopted such measures after World War II and successfully reduced its debt ratio significantly in the following decades.

　　However, Donovan also warned that governments might resort to less popular fundraising methods, such as implementing stricter capital gains or inheritance tax policies. Typically, governments initially use tax incentives or regulatory measures to channel private funds into government bonds before shifting toward wealth taxes.

　　Global public debt has exceeded $100 trillion, raising growing concerns among policymakers and markets. Especially in the United States, as one of the world's leading financial powers, its debt problem not only affects itself but could also trigger global financial instability, which has become a major concern for the international community.