Recovery is still a way off

Despite this, governments cannot be complacent. Not only could debt drag on growth, the ‘kindness of strangers’ will also hinge on yield/ratings considerations.

Yet, not to ‘crowd out’ recovery, funding costs will have to be held down, adding to political incentives to keep the printing presses running.

And, even if growth is preserved, competing demands may relegate infrastructure and green initiatives, while debt ownership raises political tensions and puts strain on many emerging markets.

This suggests QE will be even harder to kick, potentially further widening disparities, and blurring the operational distinction between the monetary and fiscal authorities.

The issue then is whether hyper-inflation beckons, or that, with ultra-low rates/QE part of the problem, we move closer to ‘a Japan’. We suspect the latter.

Either way, with each involving malfunctioning economies, it seems likely that sweeping ever-growing debt under the carpet will at some stage trip up policymakers.

Neil Williams is senior economic adviser at Federated Hermes