The level of government debt around the world has ballooned since the financial crisis, reaching levels never seen before during peacetime.

A Deutsche Bank analysis shows the world’s major economies have debts on average of more than 70 per cent of GDP, the highest level of the past 150 years except for a spike around the second world war — raising profound questions about the sustainability of the global debt pile.

Unlike earlier eras, when governments typically ran surpluses during peacetime, the pressures of modern democracy and welfare systems have made persistent deficits the norm in many countries. Meanwhile, anyone hoping for a repeat of the great deleveraging of 1945-80, when the national debt-to-GDP ratios of the UK, France, Japan, Australia and Canada fell by more than 100 percentage points, could be in for a disappointment.

“The problem in sustainably recreating such a scenario today is that the post-WWII era saw much higher levels of GDP growth due to favourable demographics, post-war reconstruction and high productivity growth,” said Deutsche’s Jim Reid.

Mr Reid argues we are likely to see central banks continue market interventions that have enabled governments to take on more debt since the crisis, perhaps even financing spending directly with so-called “helicopter money”.

“We’re actually not a million miles away from this,” he said. “By their aggressive actions over the last decade, central banks have effectively trapped themselves into continually intervening in government bond markets. They’re arguably beyond the point of no return.”