Why is the World in debt, how do we pay it off, and why should we care?
In: 69
Countries borrow money from investors to fund government expenditures greater than they take in for taxes. It gets paid off by retiring bonds when they mature. If more bonds are issues than mature, the debt grows. If fewer bonds are issued than mature, the debt declines. Governments’ ability to spend more than they take in can be crucial, as times of tax collection reductions correspond with times of needed government spending — times like a recession where stimulus is needed to counter unemployed workers’ loss of paychecks; public emergencies like COVID response and vaccination programs; war
Latest Answers