Sovereign Debt is Eating the World

November 13, 2023

by Peter St. Onge Mises.org

Sovereign debt is eating the world. Lining up a financial crash that could make 2008 look like a picnic.

How did we get here?

In short, governments and central banks deluded themselves into thinking that unlimited deficit spending financed by unlimited money printing won’t do what they’ve done for literally millennia — plunge the economy into stagflation.

They are, of course, wrong. And we’re seeing the catastrophe unfold before our eyes.

From Nixon to $33 Trillion in Debt

The story begins in the 1970s when Nixon broke the global gold standard, unleashing permanent deficits worldwide. But the latest chapter starts in 2008 when central banks bailed out the financial system by effectively printing trillions of dollars.