For almost 40 years, we’ve lived in an era of low rates and easy money. It let governments and businesses worldwide run up piles of debt.

Global debt could easily reach $500 trillion in a few years. And yet everyone acts like that is normal and can continue.

Just like subprime mortgage debt triggered the last recession, corporate debt will trigger the next one. This will start a liquidity crisis and create havoc in all sorts of “unrelated” markets.

Investors will learn once again that all asset classes globally are correlated in a crisis. There will be few places to hide.

But then, as all recessions do, this recession will end. And recovery will begin, because that is what happens after recessions.

Except it will be different this time.

The Rise of the Far Left

Recovery from the Great Recession was the slowest on record. The next recovery will be even slower.

Debt is future consumption brought forward. We are now enjoying consumption and growth that won’t happen in the future.

Debt is a drag on future growth. And the amount of debt the world now has will be a monster drag on future growth.

Recessions always bring higher unemployment, on top of technology-driven job losses. This will worsen the current political tensions.

Humans want scapegoats. Many will blame markets and capitalism, when we have neither free markets or true capitalism.

The progressive left’s siren song will begin to play everywhere. They’ll promise guaranteed basic income, free college, free everything, etc.

If you haven’t already heard of the economic insanity called Modern Monetary Theory or MMT, you will.

It says we don’t need to worry about government debt. We should simply monetize it. Create and spend whatever we need for the common good.

They produce fancy equations and rationales, but monetization is the bottom line. It’s essentially what Alexandria Ocasio-Cortez and others in her world espouse.

They talk about raising taxes on the rich. But there’s simply not enough money to do what they propose—even if you take everything the rich have.

The arithmetic doesn’t add up. So they will add more debt and eventually monetize it. Which is exactly what Japan has done, and seemingly succeeded.

Politics Will Drive Everything

US government debt will easily reach $30 trillion within three years after the next recession.

Once we begin the next economic experiment, another recession will come shortly. Markets will be even more distresses. And the debt will soar to $40 trillion.

Pensions and government deficits will be completely upside down. And then the real fun will begin… quantitative easing on a scale that makes the Bernanke years look like an elementary school picnic. We will simply have no choice.

Now, the world will not come to an end.

Markets and most businesses will figure out how to survive. New businesses will keep launching. New technologies will thrive.

We will continue to need food, shelter, transportation, communication, and all the things we think of as normal today.

This will all happen while technology “eats” jobs faster than it creates them. It was all well and good when we went from 80% of the workforce on farms to 1% today. But that happened over several generations and centuries.

We are going to see that kind of upheaval in many industries in half a generation. Can you blame frustrated workers? People wishing that they can have their jobs protected? Wanting the government to do something?

In the coming decade, I think politics will be more important to markets than ever before. That is not to say investors can’t figure it out.

But if you are looking at past historical performance to guide your portfolio, you will be disappointed.

We are about to enter an era unlike anything in our own experience or in our history books. Analogies? Surely. History, and economic and political history, will be ever more important.

How should then we invest? One thing I can tell is that the coming decade will bring a lot of volatility. Buy and hold investing will be dangerous. Active management is once again going to be key.

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John Mauldin is the chairman of Mauldin Economics, which publishes a growing number of investing resources, including both free and paid publications aimed at helping investors do better in today's challenging economy.