So what happens to government debts after the pandemic?

In most of the developed world, governments' economic strategy for the pandemic was to lock down the economy, take on massive additional debts, and give all that money away to everyone who might be affected by the lockdowns to keep the people compliant.

This would be fine, if the lockdowns were "two weeks" as was originally promised, but it's been already over a year, and depending on how new variants work against vaccines, it might take a few more years for the pandemic to end, and then another few for the economy to go back to normal.

It's common to look at GDP numbers, and claim it's not that bad, but GDP statistics are easily falsified by overwhelming short term cash injection.

Crime wave

A small side note, not terribly relevant to the main argument.

Many countries went through waves of riots (also known as "mostly peaceful protests" in propaganda media) and increased serious violent crime. 2020 in US had the highest homicide rate since late 90s, and 2021 data looks even worse than 2020 data. It's not as bad as early 90s, but it definitely is bad.

Some people make excuses that many other categories of crime didn't increase - but it's harder to commit burglaries if people stay at home.

Especially adjusted to prime crime committing population (young men, about 15-30), serious crime rates might already be as bad as in the '90s, it's just marked by including much more elderly in the denominator, who cannot commit any serious crimes even if they wanted to.

It's unclear if this is mostly an US specific issue, or if other countries are just as affected.

It's quite likely that this crime wave will take decades to go down to pre-pandemic levels, and until then, it will interfere with economic recovery.

Debt levels

Western countries already had record high debt levels before, as they never properly recovered from the 2008 recession.

Here's some visualizations of how bad debt levels already are. And it will keep increasing for as long as the pandemic is ongoing.

The quite recent orthodoxy that government debts should never exceed about 60% of GDP and shouldn't get even close to that except in most unusual circumstances, looks hilarious when the new normal is 100%+ debt for everyone, and 200%+ being nothing unusual.

Why is nobody even talking about it anymore?

So what happens next?

There really aren't that many things that can be done with such levels of debt. It would need to be some combination of.

Not paying the debt:

• government could repudiate all or part of the debt, just say it won't repay it, and get over it - the chance of this happening is basically zero for as long as politicians can kick the can down the road
• government could negotiate with creditors to get the debt down to more sustainable levels - Third World countries do that occasionally, are we going to see more of it?
• government could print more money and erode debt through sustained high inflation - if expected inflation is 2%, then 20 years of higher 5% inflation is about equivalent to reducing the debt burden by about 40%. This is the cleanest solution, but we live in heavily inflation-phobic era, and even hitting 2% consistently seems to be a problem for central banks. Even worse many developed countries are not monetarily independent, but enslaved to the ECB.

Repaying the debt:

• fast economic growth could erase debt to GDP ratio by rapidly increased GDP. Except the now dominant green anti-growth ideology is virulently opposed to the very idea of growth. They're virulently opposed to even building the much needed infrastructure (like the Heathrow Third Runway), and have been very effective at either preventing new infrastructure, or delaying it and increasing its cost so much it amount to basically the same thing. Even without the destructive green ideology, and NIMBYs, and all sort of special interests effectively using political process to block any potential competitors, it would be really difficult to achieve fast growth. Demographics of Western countries are all terrible - none except one have healthy demographic growth, and the one exception Israel only does it through Haredi population which largely refuses to integrate with modern economy, and is a huge burden on the rest of the society.
• government could increase taxes to repay debt - taxes in most developed world are already very high, and the harder you squeeze, the more harmful it is to the economy; increasing taxes by much is also politically very difficult, so politicians are trying their best to pass sneaky anti-democratic pseudo-taxes - for example "taxing Amazon" (which obviously will be 100% paid by people who buy from Amazon). We'll definitely see more of that, but this doesn't come even close to addressing the enormity of the debt.
• government could cut spending to repay debt - this works in theory, but it's a political suicide, and even if one party does it for the good of the country, very often opposition reverses the cuts as soon as they get the power
• selling or long-term-renting government property - this could be done to reduce debt a bit - for example US federal government own obscene amount of lands it doesn't use, and doesn't plan to use, and which could be sold (or at least transferred to the individual states, which then can use or sell them).

Living with the debt:

• paying interest, at rates compatible with historical rates - back in the 90s government interest rates in US were about 6%. At 200% debt to GDP ratio, this means 12% of GDP - or 1/3 of government revenue - goes to paying just interest, with no reduction in principal. This is ridiculously politically unsustainable.
• paying interest, at very low rates - if on the other hand interest rates were more like 2%, then such payment can be sustained, but how can government ensure that the rates stay this low indefinitely? As Japan shows it is possible, but only by monetary policy so brutal that it makes economic growth impossible. Government pretty much has to either make it impossible for any private investment to offer better rates; or force banks to take government debt, and starve private sector of any credit.

And that's the full list. There's no combination of these that looks good.

MMT is nonsense

Yes, MMT is nonsense, no point wasting time on it. It's basically stupid motte of "if we accept very high inflation, we can money print ourselves out of any debt" with bailey of "inflation will magically not happen".