In order for the global economy to avoid a slump as a result of premature fiscal consolidation by UK and other developed economies, it would be incredibly helpful if the G7 and other wealthy nations could collectively convert their incremental Covid debt into the equivalent of 100 year war bonds.
If they all issued these bonds, then the normal beggar my neighbour that goes on between sovereign borrowers, and which could be devastating for individual nations and collectively sub-optimal for global recovery, could be avoided. It would also allow most rich nations to avoid growth impairing and public-service damaging austerity, on the important path back to fiscal sustainability - which would avoid strife and civil unrest in divided country like the UK, but would also be good for poorer nations, in that they would benefit from the sustained external demand.
As it happens the UK holds the presidency of the G7 group of the world's richest nations in 2021. The boldest version of a plan like this would be for the G7 nations to mutualise their debts. I fear there is little prospect of them pooling the risks.
But if they all collectively and unilaterally converted the incremental Covid debt into 100 year loans, none could be individually punished by markets. It is just a random lockdown Friday thought. But I assume Rishi Sunak and Boris Johnson will be devising some kind of plan to corral the G7 into a collective global recovery plan. Or am I being naïve in thinking that a crisis of such historic scale demands a history-making response?