I keep reading how in the UK it’s poor economic literacy for Rishi Sunak to use personal borrowing as an analogy for a country borrowing money. I’ve tried to read about it but I just get confused on the details, economics is just not a strong point. The credit card maxed out is easy to relate to just with bigger numbers, but I understand things don’t translate when going from small to big but I just can’t get my head around why in this instance.
In: Economics
It’s not, except for a major country such as the UK or the US.
The main point at which the analogy fails, is that a low personal credit score would lead to you being rejected for loans, and that’s also true for smaller countries (they are less likely to find someone to lend to them), but that’s not really true for superpower countries.
Of course, there are other reasons why debt is bad even for a major country.
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