ORLANDO, Florida - If you're wondering why there is so little desire anywhere in the developed world to tighten fiscal or monetary policy, take a look at a chart published this week by the International Monetary Fund. It is worth a thousand words. In a preview of the Fund's upcoming World Economic Outlook, Managing Director Kristalina Georgieva presented a chart taken from a paper by Harvard-based researchers showing that the likelihood of young Americans growing up to earn more than their parents has never been lower.

Barely half of Americans aged 30 are earning more than their parents, compared with more than 90% half a century ago, the study finds. It's a stark statistic that calls into question not only the "American Dream" but also a fundamental pillar of liberal capitalism, the idea that each generation will enjoy higher living standards than the last.

While the paper was published in 2017 and thus focused on "Millennials", it is safe to assume the subsequent "Gen Z" and "Gen Alpha" cohorts are not faring much better. They are coming of age in a post-pandemic world marked by polarized politics, inequality, unaffordable housing, the AI disruption, dwindling pensions, and rising retirement ages.

These threats reflect what Georgieva calls the "deep undercurrents of marginalization, discontent, and hardship" impacting young people around the world, not just in America.

Growing fear of this deep disillusion may help explain why policymakers across the developed world are seeking to juice their economies by simultaneously revving up their monetary and fiscal engines - even in the face of the AI capex boom, above-target inflation, ultra-loose financial conditions, deteriorating public debt dynamics and record-high prices in many financial markets.

'A PROPER BOND MARKET RIOT'

This massive dovish tilt in many advanced economies has accelerated in the past year.

In the United States, President Donald Trump's "One Big Beautiful Bill Act" - chock-full of tax breaks - will add an estimated $3.4 trillion to the budget deficit over the next decade. Trump has also floated the idea of using tariff revenues to send Americans checks of up to $2,000, and of course, the Federal Reserve has resumed cutting interest rates.

Germany has scrapped its "debt brake" and is preparing a fiscal splurge of up to 1 trillion euros, while reluctance to take tough budget decisions has plunged France into political chaos. And investors are betting heavily that Japan's likely new prime minister Sanae Takaichi will make an unambiguously dovish turn in Tokyo's fiscal and monetary policy stance.

"Politicians everywhere have fallen into a fiscal trap of their own making; increasingly hostile electorates will surely not tolerate the pain necessary to avoid government debt spiraling out of control," says Albert Edwards, strategist at Societe Generale and long-term market bear.

The surge in gold's price this year is the clearest sign that investors are concerned about creeping global "fiscal dominance," when governments' tax and spending plans tie monetary policymakers' hands, Edwards says. Many analysts share his view that this will lead to more currency debasement and higher inflation.

Can anything halt this trend?

"The only way to break the 'Kicking the can down the road' philosophy is a proper bond market riot," Edwards says, adding that it won't be until inflation is 15% or higher that a figure like former Fed Chair Paul Volcker or UK Prime Minister Margaret Thatcher will "sort out the chaos."

Inflation on that scale, and the draconian response to it, is not on the immediate or even middle-distance horizon, of course.

In the meantime, financial markets are booming, meaning the rise in paper wealth is outstripping economic and income growth, to the relative detriment of the young. Perhaps AI will spark a productivity boom to narrow that gap, but that remains to be seen. And even if it does, entry-level positions – young workers' first step toward wealth creation – will likely be the ones most at risk from AI disruption.

It's a safe bet that many of the policymakers gathering in Washington for the IMF/World Bank meetings next week will keep pressing the fiscal accelerator. Whether that will ultimately be good or bad news for the disillusioned young is another question.

(The opinions expressed here are those of the author, a columnist for Reuters)

(By Jamie McGeever. Editing by Hugh Lawson)