Staggeringly high government debt levels around the globe may stick — a huge shift from previous years that could come despite the warnings of economic damage this dynamic may cause.

Why it matters: Aging populations, worsening partisanship, steepening interest rates and other factors could make it less feasible for governments to reduce their debt — even if they want to.

What they're saying: "[D]ebt reduction, while desirable in principle, is unlikely in practice," International Monetary Fund economist Serkan Arslanalp and University of California, Berkeley, professor Barry Eichengreen write in a new paper.

• They argue that ballooning government debt worldwide won't decline significantly in the coming years as in decades past. "Countries are going to have to live with this new reality as a semipermanent state."

Details: The paper, presented Saturday before global central bankers and leading economists at the Kansas City Fed's Jackson Hole conference, says a collision of new forces will make it difficult to trim debt.

• Demographics: Aging populations mean governments must spend more on health care and pensions.
• Green transition: In the U.S. and elsewhere, governments are ramping up spending to finance the transition to a greener economy.
• Interest rates: Higher borrowing costs mean any growing debt load will get even more expensive to service. (Meanwhile, inflating the debt away is not a "sustainable route to reducing high public debts," the authors note.)
• Politics: Political polarization and divided government make long-lasting policy arrangements to trim the debt— raising taxes or cutting spending— "even more challenging than in the past," the authors write.

Where it stands: Global debt ratios have increased, on average, from 40% to 60% of GDP since the 2008 financial crisis, the paper notes. The jump has been even larger for wealthy nations, to nearly 85% of GDP on average.

• The surge represents bank bailouts, slow economic growth and budget deficits in the years following the financial crisis.
• Then came COVID-19: The debt pile exploded as governments borrowed big to address the emergency and support constituents.

By the numbers: In the U.S., federal debt held by the public is expected to equal 98% of GDP by the end of 2023.

• Debt is expected to keep rising in relation to GDP over the next three decades to record levels, according to the Congressional Budget Office — which warned of "far-reaching implications for the fiscal and economic outlook."

The bottom line: A new period of permanently higher debt loads is less dire for many rich nations, including the U.S., where debt is in high demand and still considered safe.

Go deeper

Demand for new workers cooled in July alongside more moderate hiring and historically low layoff rates.

Driving the news: The latest Job Openings and Labor Turnover Survey (JOLTS) suggests the ideal labor market rebalancing that Fed policymakers want is underway. Vacancies are easing without a big jump in unemployment.

• But it also suggests that the era of heightened worker power — as indicated by an elevated quits rate — might be near its end.

Details: There were 8.8 million job openings in July, a decrease of 338,000 compared to the prior month. That means there were 1.5 open jobs for every unemployed worker, the lowest ratio since Sept. 2021.

• Meanwhile, the hiring rate ticked down by 0.1% to 3.7%, in step with the pre-pandemic hiring rate.
• The layoff rate held at a low 1% for the fourth straight month.

The intrigue: Remember the Great Resignation? In July, the quits rate was 2.3%, the lowest since January 2021, matching the months before the pandemic.

• The quits rate among private sector workers fell to 2.5%, well below the most recent peak of 3.3% in April 2022.
• The indicator is the latest sign that the COVID-era quitting frenzy looks to be in the past.

The bottom line: "While most Americans who want a job have one, it is not as easy to find new work as a year ago. Hires and quits are back to their pre-pandemic levels, and job openings are falling rapidly," Bill Adams, chief economist at Comerica Bank, wrote in a note.