How is the US in trillions of debt but still able to spend more money and deepen said debt without having to repay anything?
In: Economics
Because at the same time you’re borrowing money, you’re also paying it back on a fixed schedule.
Borrowing 100bil from the people today, pay it back on a fixed schedule like say 10 years and not a day before. In a month, borrow another 100 bil. Pay it back in 10 years and not a day before.
Why should we loan the gov money? Because the US gov has NEVER EVER defaulted on a payment. Ever. Period. So it’s pretty safe bet that in 10, 20 or 30 years, the gov is gonna pay back each loan.
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