According to asset manager Janus Henderson global government debt soared by a fifth to a record $62.5 trillion by the end of 2020 in the wake of the coronavirus pandemic.

On the corporate side Janus Henderson reported borrowings up 10% worldwide to $13.5 trillion. So we’re looking at a combined number upwards of $75 trillion and rising.

Sometimes numbers get too big for us humans to handle with academic research confirming our difficulty in interpreting numbers once they get beyond levels we encounter in our everyday life.

It’s easier to understand what racking up £10,000 on a credit card might mean for you as an individual than working out what the trillions of debt washing around the world right now might mean.

Sometimes this leads to a conflation between household and government and corporate debt which probably isn’t that helpful, particularly when it comes to sovereign debt.

Historically borrowings at these levels would mean crippling interest payments for both countries and companies, however an exceptionally low rate environment means that isn’t an issue.

Investment bank Morgan Stanley notes that the US is spending less on debt interest today with debt to GDP at a level of roughly 128% than it did in 1981 when the debt to GDP ratio stood at a little more than 30%.

Morgan Stanley strategist Andrew Sheets comments: ‘Obvious things can still matter. Across a number of metrics, this is an unusually good moment to borrow money. While we’re mindful that “yields are low” has been a steady cry throughout the last decade, today we’re seeing borrowing costs, ability and need align in a unique way.’

Sheets notes that not only are the absolute costs of borrowing low but they are also low in ‘real’ terms thanks to increases in inflation.

‘When debt funds an asset (capex, infrastructure, a house), it’s likely that the asset’s value, at a minimum, rises with inflation. This is why deflation is so bad, and self-reinforcing: if the value of things falls every year, you should never borrow to buy them, which constricts credit and creates even more deflationary pressure,’ he adds.

With pre-pandemic concerns about a stagnating economy switching to fears over inflationary pressures Sheets notes the economics of borrowings are improving ‘materially’.

He goes on to point out that ‘capital markets are wide open’ meaning there are few problems with the ability to borrow.

Plus for anyone fearing this could prompt a repeat of the 2007 credit crunch, he notes banks have big capital buffers and are sailing through regulators’ stress tests.

Finally he’s encouraged that the need to invest in combating climate change is creating an impetus for businesses and governments to spend big after a decade when limited growth deterred investment and in turn the lack of spending undermined growth.

‘What’s good for the borrower, of course, is bad for the lender. Given valuations and the incentives to issue, investors should favour equities over credit and be underweight government bonds,’ Sheets concludes.

That said, not all borrowers are equal - and countries in the developing world cannot afford to be quite so relaxed about mounting debt as their developed world counterparts. Debt might not ring alarm bells for investors until, suddenly, it does. Perhaps when central banks finally begin removing the global economy from life support.