Ignore the January jobs report. Yes, the US economy has added 1 million jobs in the past three months, and that’s great news for everyone. [ed. added Friday morning] But really, just forget it. If you really want to know what’s going on in the global economy and what’s at stake in the 2016 election, read McKinsey Global Institute’s latest report “Debt and (not much) deleveraging.” And while you are at it, read two other groundbreaking MGI reports, “Disruptive technologies: Advances that will transform life, business, and the global economy” and Global flows in a digital age.
Together the three MGI reports tell a persuasive story that the global status quo going to break sometime soon–the only question is in what direction. On the one hand, global debt has grown by $57 trillion, as the first report shows, which “poses new risks to financial stability and may undermine global economic growth.”
This massive global borrowing is only justified if global growth accelerates enough to pay down the debt. That sort of global boom will require the disruptive technologies that MGI so ably describes in the other reports.
So here’s what we can expect around the corner–either a global financial crisis bigger than the last one, or an explosion of disruptive technologies that will transform our world. Or as a friend said, somewhat sarcastically, “Great! I can’t wait!”
And that’s why the 2016 election in the U.S., and comparable elections around the world, are so important. The next stage of the global economy is going to be fraught with surprises, both good and bad. We need political leaders with the skills to negotiate a complicated and unexplored economic and technological landscape.
[Headline modified on 2/6/15]
[Text added on 2/7/15]
