The United States and Japan face mounting financial consequences from prolonged debt-fueled economic policies implemented since the 2007 financial crisis. Both nations accumulated substantial deficits while attempting to sustain living standards through borrowing rather than structural reforms. High inflation now emerges as a potential, albeit problematic, mechanism to erode real debt burdens. This analysis examines how fiscal mismanagement during the post-crisis decade has created limited exit strategies for major economies, forcing policymakers to choose between inflation tolerance and severe fiscal consolidation.

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