Government debts are piling ever higher as the coronavirus pandemic heads toward its second year, with many businesses and households in parts of the world still reliant on the public purse to stay afloat.
But one lesson that many governments in rich countries have learned from the last financial crisis is that they risk doing more harm than good by trying to roll back that surge in borrowing before their economies have healed, however long that takes.
That view makes it unlikely governments will soon resort to the kind of spending cuts seen in the years following the 2008 financial crisis, and more likely they will rely instead on economic growth and low interest rates to shrink their debts over a longer stretch of time.
This post first appeared on wsj.com
