Almost two decades ago, when trillions of dollars in private housing debt proved unsustainable, governments had to step in to prevent the worst financial crisis since the Great Depression from eclipsing it. But now governments have their own debt problems, and if they don’t get them under control soon, there will be nobody to step in next time.

Not since World War II have the finances of advanced economies looked so precarious. The problem predates 2020, but it accelerated that year, when governments took on major debt to prevent the pandemic’s economic shocks from becoming cataclysmic. In the years since, they have continued high levels of deficit spending, and as a result, their total debt has surged from about 70% of gross domestic product in 2007 to 110% in 2025.

The problem has been most severe in the US, where elected officials have acted as though debt no longer matters and bills can go on endlessly piling up. US total debt as a percentage of GDP is now higher than it was even during and after World War II. And what have Americans gotten in exchange for this debt?

Not a transformation of its infrastructure, which continues to lag behind other advanced economies. Nor major improvements to health and educational outcomes, which continue to decline. Nor a vast stock of critical military weapons, which have been severely depleted this........

© Bloomberg