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The World’s Drowning in Debt — Brace Yourself for Economic Turbulence | American Enterprise Institute

When it comes to a country’s overindebtedness, the four most dangerous words are “This time is different.”

As Harvard’s Kenneth Rogoff and Carmen Reinhart taught us in their magisterial book “This Time Is Different: Eight Centuries of Financial Folly,” unless addressed promptly, overindebtedness almost always ends in tears — an economic, banking or exchange-rate crisis.

How much more should we be worried about the world’s long-run economic outlook?

It’s not only a single major country with troubling debt.

Each of the world’s major economies has a serious debt problem caused by too many years of irresponsible budget policies and zero interest rates — and could make it all the more difficult to avoid a recession and renewed financial strain at home.

Take the United States, the world’s largest economy.

At a time of cyclical economic strength, when the…

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