Eli5: How can some country have trillions of dollar in debt like Japan but still functional without any consequences?

Question

Eli5: How can some country have trillions of dollar in debt like Japan but still functional without any consequences?

In: 101

Answer 1

Nations debt is not the same kind if debt as private individuals gets.

It doesn’t matter how much debt as major economies have nowadays, they will always get more because they keep paying their old debts with new.

Now this system works, just as it is intended; as long as the local and global economy keeps growing, and there is steady inflation. You have to remember that inflation eats away the value of debt, and as economy grows it needs more money.

Goverment debt is not a bad thing, as long as it pushes forward economic growth. Even debt used to fund welfare supports the economy by allowing poor/unemployed/etc people to participate in the economy. It is better to have those people as economic factor than not… also stability of society is important for modern economy to work