What happens when public debt stops buying progress?

FOR much of the post-war era, rising public debt was associated with infrastructure expansion, educational progress and stronger public institutions. Governments borrowed, but citizens could see improvements in public services and living standards. Today, that relationship appears increasingly broken.

Across the advanced democracies, public debt has risen to levels not seen outside major wars. Yet, productivity growth has slowed, educational outcomes have weakened, and public trust in institutions has declined.

The central challenge is not simply the level of debt. It is whether governments are generating sufficient returns from their resources.