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Strauss-Khan said public debt in advanced economies were forecast to rise about 35 percentage points to about 110 percent of gross domestic product by 2014.
"Reversing this increase will be a tremendous challenge—let alone reducing debt below pre-crisis levels, which may be needed to leave enough fiscal space to tackle future crises," he said.
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Policy Cycle
National debt of governments rose due to 'stimulus spending' and banks bailouts caused from a burst bubble fired principally by the US Federal Reserve which kept interest rates abnormally low from 2001 amid a war with Iraq.
When rates were eventually raised to 5.
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25 percent an asset, commodity and credit bubble collapsed sending the US and the world into a 'harder-than-expected-landing'.
Straus-Kahh said central banks started targeting low levels of inflation to re-establish credibility following the steep price rises of the 1970s.
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The 1970s so-called 'great inflation came after the US defaulted on the Bretton