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Yes. If anything, the bigger issue is national debt. It can be broken out into investments versus borrowing for transfer payments, but either way the #s come
by mathattack 10y ago
Yes. If anything, the bigger issue is national debt. It can be broken out into investments versus borrowing for transfer payments, but either way the #s come out much higher. And it's easier for consumers to walk away from debt in a bankruptcy than it is for a country.
- rootusrootus 10y agoThat is a difficult comparison. If all of my debt was denominated in a currency that I explicitly controlled the supply of, I wouldn't need to declare bankruptcy, I'd just increase the supply of money so I was solvent. At this time, the cost to the nation of servicing the debt is around what, 6 percent of income? I bet a lot of consumers (more than half) would find that to be very affordable.
- mathattack 10y agoYes - interest rates on our debt is low. But increasing the money supply will eventually come with inflation, and with that higher interest rates. Eventually people will stop lending countries money. If they don't - that's even scarier. (A lack of viable investment alternatives)