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The same as always? Pay old debt with new debt. Other countries might run into issues with exchange rates this way, but the status of the USD is dampening such
by generic92034 2y ago
The same as always? Pay old debt with new debt. Other countries might run into issues with exchange rates this way, but the status of the USD is dampening such effects.
- the_real_cher 2y agohow long can you do that for?
- generic92034 2y agoMost countries in the West are doing that at least since WW2. To different degrees, though.
- the_real_cher 2y ago> To different degrees, though. There's quantifiable data on this and it's looking problematic as of now.
- creer 2y agoEven assuming there are always people, institutions and countries eager to buy the new debt, the government must still pay the ongoing interest on the debt. The concern is when that interest becomes a significant part of the annual budget. Then there is no money left to pay for the essentials - like, /s - government workers' salaries and retirement and military.
- generic92034 2y agoYou can pay the ongoing interest with more debt. Sure, this will probably not work forever, not even for the USA and the special status its currency has. But "forever" is usually not a relevant concept for politicians.