Why is almost every country in debt?


Why is almost every country in debt?

In: 7

Because you don’t always have the amounts of money required to pay to keep a country going in one chunk.

It’s usually not a problem as long as the country is pulling in enough income to theoretically pay it off in future then that’s OK.

You make constant payments on them and when you can no longer afford to make the payments on those debts or its spiraling towards that then banks and other organisations take steps to make people hesitant about continuing to lend you money and more drastic action is required as you are forced to pay back even more whilst losing access to money.

Because you can’t maintain the lifestyle that you have with your productivity and as such you are technically stealing some wealth from the future on a county wide scale.
Countries go in dept because they spend more than they make and that’s a mathematical fact.

It’s easier for governments to borrow money or sell debt than to raise taxes or tariffs to get money. So when they need money, they incur debts instead of trying to pass new taxes.

The nature of economics for a nation means today’s large debt is tomorrow’s downpayment. Investing in infrastructure and support systems pays off far more returns than the interest costs, and in scalable terms the debt becomes insignificant over time.

The alternative is for a government to run at a profit for a while. Citizens would probably ask, “why can’t we cut taxes and/or increase spending?”

It’s not quite impossible. Norway might be doing it — banking the country’s oil revenues against the future when they won’t have them. Likewise, Alaska has its oil fund.

Because we have a bad system in which there is more debt in existence than all money combined.

I studied this!

Let me make it way more basic:

Money is created two ways: by bank loans and by government spending
for(national governments that own their own currency like USA’s dollar or Japan’s yen).

It is uncreated by paying back the loan and by taxes.

All of this money is *accounted* as debt. We need new money to maintain the existence of markets. The economy is always growing: more people, more stuff, and more money invested, so we always need new money. That new money is always counted as debt.

Next, ask me why bonds are still money, and better thought of as money rather than loans to the government.