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In the 1980s, only 2 percent of publicly traded companies in the U.S. were considered zombies, a term used by the Bank for International Settlements (BIS) for companies that, over the previous three years, had not earned enough profit to make even the interest payments on their debt, Sharma wrote. The zombie minority started to grow rapidly in the early 2000s, and by the eve of the pandemic, accounted for 19 percent of U.S.-listed companies. Its happening in Europe, China and Japan, too.

And its all logical. Prolonged and increasingly generous bailouts, where governments are willing to buy even corporate junk bonds to prevent foreclosures, added Sharma, distort the efficient allocation of capital needed to raise productivity.

The past few years should have been an era of huge creative destruction. With so many new cheap digital tools of innovation, so much access to cheap high-powered computing and so much easy money, start-ups should have been exploding. They were not.

Before the pandemic, the U.S. was generating start-ups and shutting down established companies at the slowest rates since at least the 1970s, wrote Sharma. The number of publicly traded U.S. companies had fallen by nearly half, to around 4,400, since the peak in 1996. (The number of start-ups has increased in the pandemic, but that may be because so many businesses closed.)

Alas, though, big companies are becoming huge and more monopolistic in this easy money, low interest rate era. It is not only because the internet created global winner-take-all markets, which have enabled companies like Amazon, Google, Facebook and Apple to amass cash piles bigger than the reserves of many nation-states. Its also because they can so easily use their inflated stock prices or cash hordes to buy up budding competitors and suck up all the talent and resources crowding out the little guys, Sharma said.

Meanwhile, he added, as governments keep stepping in to eliminate recessions, downturns no longer play their role of purging the economy of inefficient companies, and recoveries have grown weaker and weaker, with lower productivity growth. So it takes more and more stimulus each time to prop up growth.

This is all actually making our system more fragile.

Now that so many countries, led by the U.S., have massively increased their debt loads, if we got even a small burst of inflation that drove interest on the 10-year Treasury to 3 percent from 1 percent, the amount of money the U.S. would have to devote to debt servicing would be so enormous that little money might be left for discretionary spending on research, infrastructure or education or another rainy day.

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