Why do governments care so much about reducing public debt if they are the sovereign issuer of their currency?
In: Economics
Truthfully they don’t. The rhetoric about national debt is a very effective bludgeon for reducing spending on social programs. Those who claim to worry about debt NEVER want to fix the problem by cutting military spending or by raising taxes, they only ever propose to solve the problem by cutting the already paltry amounts given to things like food assistance and Medicaid. Many sovereign countries have far higher debt ratios than the US without significant problems. Anyone in power knows this, which is why national debt reduction is an ideological rather than economic project.
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