Western governments hardly operate on a shoestring budget, rather they've spent generations spending profligately with the assumption that massive sustained economic growth would bail them out without having to make any hard tradeoffs. That strategy has worked out ok so far but it has always been a fragile one and we might be entering an era where it fails to work in many places.

The transition to much lower deficit spending certainly won't be popular and might go catastrophically poorly. I actually think there's a pretty good chance that things will go quite poorly, but there's no reason it has to be so.

> there's no reason it has to be so.

Besides basic human nature.

Well, mainly the majority of wealth is being focused in the hands of a minority of private individuals and corporations which rather hamstrings the budget.

What currency are the loans denominated in?

If they are looking at a large aged population (lots of retirement savings) and lots of debt, inflation seems like an obvious solution, right? People not working will take a QoL hit due to their savings being worth less. But that is… what it is, I guess.