How do governments manage massive amounts of debt without going bankrupt or running out of money?
In: Other
They can. Orange County California declared bankruptcy in 1994.
The US government, however (and other sovereign nations) cannot, because US debt is issues in US dollars, and the only entity in the world that can generate US dollars is the US government. So the US government can always generate more US dollars to pay off its debt. If we ever got to this point it would be very, very bad for our economy.
Latest Answers