Government debt has reached levels not seen since the WWII post-war period, 128% of global gross domestic product, according to a July report by the International Monetary Fund.
In 1946, global debt levels hovered around 124% following WWII, a multi-year conflict that engulfed all corners of the globe leaving millions dead and whole nations in ruins.
Since the COVID-19 pandemic began, governments have scrambled to provide critical aid in numerous ways, including stimulus checks, emergency unemployment, and bailouts for businesses. Naturally, this has led to a noticeable increase in government debt.
While current debt levels mirror that of the post-war era, there are concerns that the post-pandemic economic recovery will not be as robust as it was in the 1950s.
For one, the post-war era was incredibly optimistic as birth rates increased and economic growth soared leading to untold levels of prosperity across the globe. By the late 1950s, annual economic growth averaged 5% in France and Canada, 6% in Italy, 8% in Japan and 4% in the U.S.