Putting those trends together, excess savings in the private sector as a whole have remained intact. Behind that, companies have made it a priority to downsize their balance sheets by repaying debts in light of harmful deflationary expectations. Put differently, deflation has led to excess savings in the private sector, and that has enabled the government to finance its debts with subdued borrowing costs.
This plan must be based on an assessment of the situation at the point of departure, and of the trends and forces that the plan will need to take into account: projected demographic trends, the unpredictable geopolitical situation, and the global environment – which is expected to be far less pleasant than it was in previous decades.