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I suppose the actual amount of government debt is an interesting concept and you can't directly compare different G20 country debt amounts fairly so using the d
by po 17y ago
I suppose the actual amount of government debt is an interesting concept and you can't directly compare different G20 country debt amounts fairly so using the debt to GDP ratio seems like a pretty good idea.
The thing is that I have no intuitive sense that this being large is better or worse. I would think the most important piece is: who owns the debt? If I sell a lot of debt contracts out to my kids, did my family get poorer? What about if I sold them all to the neighbors?
- hga 17y agoI think it depends on whether you're serious about paying it back if it's for normal expenditures (debt to fight a war is another thing altogether, but we haven't seen that since WWII for any major country). If not, you just pile it on until the carrying costs become unsustainable and then you default explicitly (perhaps through a revolution or invasion) or implicitly through inflation. Except for that fight a war special case, it's just a tax on future generations with an all but guaranteed ugly ending.
- po 17y agoHow does the carrying cost become unsustainable? Are the future generations paying the tax to themselves or to China? My gut sense is that who owns the debt is important, but I'm asking because I honestly don't know. I also feel like what you use the debt for is important.