3 ms·
Such debt would be cancelled and is not problematic. The problematic one is government owing money to citizens or institutions (domestic or foreign). If USA owe
by bluecalm 2y ago
Such debt would be cancelled and is not problematic. The problematic one is government owing money to citizens or institutions (domestic or foreign).
If USA owes 100B to a pension fund in Japan and Japan owes 100B to pension fund in USA then there is no way to cancel it. Governments have to pay the money back with interest and at some point it becomes significant burden to tax payers. It's problematic especially when those tax payers aren't the ones who benefited from spending the debt was taken to finance.
- bugbuddy 2y agoThe solution will always be inflation and devaluation. Your millions will start to feel like thousands and your billions will start to feel like millions. The first trillionaire will not be far off but because of unhappy circumstances.
- aoeusnth1 2y agoInflation is a middle ground between respecting the debt and canceling the debt. Depending on amount of inflation and time window, the government can reach any point in the (0%, 100%) debt cancelation interval.
- dh2022 2y agoThere is no way to cancel these debts because the creditors and debtors are different. The parent comment assumed creditors and debtors are the same.
- spwa4 2y agoThat debt represents a trade Japanese people made: they get to take away 100B of US production to enjoy their old age. In trade they gave the US government something. Oil. Toyotas. Whatever. The US government helpfully made that trade, promising US babies would, once grown up, deliver on that 100B of, say, labour. The real problem is that neither the US government nor (now grown up) US babies intend to hold up their end of the bargain. And vice-versa.