What can prevent a very high public debt ratio from being dangerous?

A very high public debt ratio is dangerous: If it leads to an expected loss of fiscal solvency for governments, which would lead to a sharp rise in long-term interest rates; Conversely, if it attracts savings at the expense of the private sector, which leads to crowding out of private-sector investment. A high public debt ratio is not dangerous if both these conditions are met: It is absorbed by central banks thanks to a monetisation of public debt; but the danger then becomes that of excessive monetary creation; Private-sector savings increase ( ex ante ) relative to private-sector investment, which generates savings available to finance a higher public debt level without a rise in interest rates, which is what happened in the wake of the subprime crisis.