how can advanced economies run budget deficits for basically forever?

Question

It seems that most if not all advanced economies (US, Japan, UK to name a few) have been running budget deficits since basically the last 20 years. I understand that current debts lose value over time because of inflation and economies grow, but how can they do this for basically ever? I can’t wrap my head around the maths that makes this possible, and the markets don’t seem all that worried

In: 316

Answer 1

We think of “government debt” like we think of personal debt – but the reality is that it’s more like stock in a company.