Government debt is a global problem

Finance ministers and central bankers, gathering in Washington for the annual meetings of the International Monetary Fund, face a global trading system in disarray, uncertainty over the dollar's standing and the likely course of interest rates, and financial markets that are (for now) unnervingly complacent.

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Amid all these challenges, policymakers must pay particular attention to one more: Following years of neglect, public debt has emerged as an increasingly serious risk, according to the Tribune News Service.

Five years ago, budget deficits soared worldwide because of the pandemic. Lockdowns throttled economic activity and squeezed tax revenue, while public spending surged as governments tried to protect the most vulnerable. Deficits increased from 3.5% of global output in the year before the emergency to 9.5% in 2020. No question, a strong fiscal response was necessary - but, as many argued at the time, it should've been reversed in due course. It wasn't. Even now, deficits are higher than they were in 2019.

Before the pandemic, government debt was 84% of global gross domestic product. It currently stands at 95%. In country after country - including the US, the UK and most of the European Union - it's on track to keep growing faster than output.