eli5 Why it’s bad for country to default on it’s debt?
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If I lend you money and you don’t pay me back, I’m going to hesitate to lend you money in the future. And if I do lend you money again, I’m at least going to view it as a more risky loan and charge a higher interest rate. Every country has surprises that require extra money, so even if you don’t regularly run a deficit, you’re going to need extra cash at least occasionally. Defaulting on debt won’t cause your country to collapse, but it does make keeping your country stable more expensive.
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