eli5 Why it’s bad for country to default on it’s debt?
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Everyone here is giving you the wrong answer because they confuse sovereign debt with private debt.
It’s bad for a private individual or company to default on their debt because interest rate will rise for them or they will be downright unable to get any more credit but that’s not the main problem with sovereign debt.
The actual reason it’s bad for a nation to default on its debt is the fact that the debt is held mainly by it’s own citizens which means that in case of default the citizens, and consequently the nation itself will lose wealth in case of a default.
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