By: Dr. Cubias

November 2025

A More Expensive, More Indebted, and Slower-Growing World

The year 2025 has not brought the solid recovery many expected after the turbulent post-pandemic years. The numbers are clear: the World Bank projects global growth of just 2.3%, while the OECD foresees a significant slowdown in major developed economies.

However, beyond inflation or geopolitical conflicts, a structural problem seems to be deepening the system’s fragility: the size and cost of governments.

From Washington to Buenos Aires, from Brussels to Mexico City, the trend is the same — oversized states, inflated bureaucracies, and public budgets increasingly difficult to sustain.

“Governments around the world have become the main consumers of the growth they claim to promote,” warns a report from the Peterson Institute for International Economics (PIIE). “Current spending, high public-sector wages, and unproductive subsidies are crowding out real investment.”

The Weight of the State: High Salaries, Waste, and Debt

According to the International Monetary Fund (IMF), more than 70% of global public spending now goes to current costs — salaries, administration, bureaucracy, and social transfers — while only 30% or less goes to infrastructure, innovation, or development investment.

In Latin America, the situation is even more pronounced. According to the Economic Commission for Latin America and the Caribbean (ECLAC), average government spending has grown 22% in the past five years, without resulting in higher productivity or better-quality services.

The result: record debt and less fiscal flexibility.

In countries like Argentina, Spain, or the United States, interest payments on debt already exceed entire budgets for health or education. Meanwhile, salaries for top officials, official vehicles, travel, advisers, and institutional advertising continue to rise.

Spanish economist Daniel Lacalle sums it up bluntly:

“We have governments that live like the rich in indebted countries. The consequence is always the same: more taxes, more inflation, and less real growth.”

An Economy Exhausted by Politics

The effects of uncontrolled spending go beyond macroeconomic figures — they hit ordinary citizens:

• Lower private investment, as the state absorbs credit and capital.

• Higher tax pressure, with taxes that suffocate entrepreneurs and small businesses.

• Structural inflation, fueled by overspending financed through debt or money printing.

The cycle feeds itself: lack of growth drives more public spending “to compensate,” which in turn generates more debt, inflation, and distrust.

“The real risk is not a cyclical recession, but a crisis of confidence in governments,” notes a J.P. Morgan Research report published in October 2025.

How Citizens Can Protect Themselves from Inefficient States and Unstable Economies

In this context, individual economic stability no longer depends on government direction but on each person’s ability to shield their finances.Below are the strategies experts recommend to survive — and thrive — in an era of overspending governments and weak growth:

1. Build Financial Independence

Having an emergency fund equal to six months of expenses is essential. Public debt often leads to inflation, and inflation erodes savings. Maintaining liquidity and avoiding dependence on subsidies or government programs has become a modern form of freedom.

2. Get Out of Debt and Live Below Your Means

Governments spend more than they have. Don’t repeat their mistake. Paying off consumer debt and avoiding unnecessary credit is the simplest way to protect yourself from rising interest rates or a banking crisis.

3. Diversify Income and Assets

When governments borrow heavily, currencies lose value. Diversifying into international investments, real assets, or alternative businesses can shield you from depreciation or financial controls.

4. Invest in Education and Adaptability

The labor market is evolving faster than public policy. Technological skills, data management, and an entrepreneurial mindset are becoming the new personal “insurance policies” in an increasingly volatile system.

5. Practice Smart Austerity

While the public sector resists cutting back, responsible citizens must do so — not out of fear, but out of strategy. Spending purposefully, prioritizing needs, and building long-term assets is the best form of financial leadership.

The Price of Political Waste

The problem of excessive government spending is not only economic but moral.When a country allocates millions to political privileges while its population faces unemployment or inflation, institutional trust erodes and the social contract deteriorates.

The challenge, according to experts, is twofold: demand transparency and practice personal discipline.

“If governments are not austere, citizens must be — for survival,” says Mexican economist Valeria Moy from the Mexican Institute for Competitiveness (IMCO).

Conclusion: Financial Leadership Begins at Home

The future of the global economy will depend as much on government decisions as on citizens’ responsibility.As long as states keep spending more than they produce, each individual’s challenge will be to take control of their own financial destiny.

Recession is not inevitable — but preparation must be.True leadership, in times of waste, means being an example of efficiency, awareness, and resilience.

Sources Consulted

• World Bank — Global Economic Prospects (June 2025)

• OECD — Economic Outlook Interim Report (March 2025)

• J.P. Morgan Research — Probability of a Recession 2025

• PIIE — Global Economy Outlook Spring 2025

• UN DESA — World Economic Situation and Prospects 2025

• IMF — Fiscal Monitor 2025

• ECLAC — Fiscal Panorama of Latin America 2025

• Forbes — Government Spending and Fiscal Risk 2025