How do countrys get in so much debt and why do they keep expanding on ther debt?
In: 9
If they can get loans at low interest rates, it’s actually good policy to borrow IF they invest it in infrastructure and other projects that will pay off in the long run. Unfortunately they often invest it unwisely, there’s little or no return on the investment, and when a financial crisis hits they may be forced to make severe budget cuts in order to get bailed out by the World Bank or richer countries that don’t want to see them completely fall apart. Being in debt to richer countries can also make them beholden to those countries politically, whether they like it or not.
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