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
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Assuming there’s somebody who wants to loan the money, any entity can run up big deficits forever as long as it continues to grow.
It’s kind of like when you buy kids clothes that are too big for them, assuming they’ll grow into it. It only stops working when the kid stops growing.
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