New Delhi, Aug. 12 -- From Washington to Tokyo and from Paris to London, warning signs are flashing in the world's biggest government debt markets. Anyone doubting this hasn't been paying enough attention to rising long-term interest rates, most notably the spike in the 30-year U.S. Treasury bond yield to 5.25%, its highest level since 2007.

Yet none of the governments in those capitals appear to be contemplating serious measures to put their public finances onto a more sustainable path. This doesn't bode well for the global economic outlook. A bond market crisis in any one of the world's major economies could trigger the same sort of contagion we last saw in the 2010 euro zone sovereign debt market crisis.

Start with the U.S., which is...