Global growth powered by deficits
Global growth is no longer being led by households or the private sector. It is being written into government budgets.
Across the U.S., Europe, Japan, and China, large fiscal stimulus packages are driving near-term growth, even as debt levels climb and interest rates remain elevated. Defense spending, aging populations, AI investment, and geopolitical uncertainty are reshaping what governments are willing to finance, and what voters are willing to tolerate.
The open question is not whether this works in the short term. It is how long markets remain comfortable underwriting it.
Source: https://www.wsj.com/economy/global/the-world-economy-is-hooked-on-government-debt-71491482
