Who does the government borrow money off to get credit to increase spending? And why is it seen as so bad for the government to increase its debt? I guess the main thing that I want to know is who holds a government accountable for their debt and what will happen if a government just continues to borrow and increase their debt?
In: Economics
> Who does the government borrow money off to get credit to increase spending?
Ever hear of government bonds? That is a loan that you make to the government with a repayment time frame (5 – 10years).
> And why is it seen as so bad for the government to increase its debt
It’s pure politics. Government debt is incredibly complex. It’s more like a mortgage than credit card debt.
Further, governments never need to pay off debt because governments don’t have a lifetime. They can carry debt forever.
> I guess the main thing that I want to know is who holds a government accountable for their debt
Elected officials. Budget Hawks. People calling for less spending etc.
>and what will happen if a government just continues to borrow and increase their debt?
Depends.
In the case of Greece, bad things.
In the case of the US. Probably nothing. The US national debt is a big number. 24Trillion: [https://www.investopedia.com/updates/usa-national-debt/#:~:text=The%20national%20debt%20level%20of%20the%20United%20States%20(or%20any,%2424.22%20trillion%20in%20April%202020.](https://www.investopedia.com/updates/usa-national-debt/#:~:text=The%20national%20debt%20level%20of%20the%20United%20States%20(or%20any,%2424.22%20trillion%20in%20April%202020.)
BUT the US’ GDP (i.e. income) is 21.44 trillion.
You might think that that’s bad. The Debt is higher than the GDP, they owe more than they make etc etc.
Well the average mortgage in the US is 200K. The average family income is 60K. That’s a way worse ratio than the US debt.
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