The following is an excerpt from El Erian's recent article with link to follow. Basically he says that the negative impact of debt is not being fully realized. Interesting perspective from two well recognized experts:

"Gross advised investors in a commentary published in January to seek investments in “less levered” countries such as China, India and Brazil whose economies are not as prone to “bubbling.” He called the U.K. “a must to avoid,” while recommending Germany and Canada.

The increasing debt burdens of countries including the U.S. mean many nations classified as advanced economies now may have weaker prospects than emerging economies, El-Erian wrote in Financial Times’ article.

“Countries will thus be forced to make difficult decisions relating to higher taxation and lower spending,” El-Erian said. “If these do not materialize on a timely basis, the universe of likely outcomes will expand to include inflating out of excessive debt and, in the extreme, default and confiscation.”

http://www.bloomberg.com/apps/news?pid=20601010&sid=aYI_3n1Zc13s