Questions tagged [debt]

Questions related to the accrual of debt, may it be a nation, organization or person in a political landscape. Use this tag alongside the relevant tag in the context of the question i.e. a country if necessary.

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32
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4answers
7k views

Why first world countries have astonishing amount of foreign debts, but third world countries don't?

USA, for example, having a total foreign debt of over 23 trillion dollars (according to the statistics provided in 2019), is still on the frontline of those countries which are considered to be ...
-1
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2answers
168 views

Is it possible that the US will default on its debt in foreseeable future? [closed]

The US has a history of having its debt grow, increasing the debt ceiling and repeating the cycle: Source Normally, the states don't default on debts denominated in their own currency, because they ...
3
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1answer
311 views

When does a national debt become too much?

I've always heard that it's good for countries to have debt to spark growth, but at what point does a national debt become so big that it becomes a problem?
30
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2answers
5k views

Why does the United States federal government have a debt ceiling? Isn't it entirely redundant to the budget?

In the United States, the debt ceiling limits how much money the federal government can borrow. This ceiling was apparently introduced in 1939. Why does the debt ceiling exist? Congress approves the ...
4
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1answer
205 views

How big a short term debt ceiling increase is McConnell agreeing to?

Senate Republicans have thus far refused to raise the debt ceiling, which needs to be raised by October 18 to prevent the US Government from defaulting on the national debt. They have been insisting ...
5
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1answer
168 views

What new reconciliation powers has Schumer obtained?

Senate Minority Leader Mitch McConnell just sent a letter to President Biden explaining why Senate Republicans don't intend to vote to raise the debt ceiling, which needs to be raised by October 18 to ...
9
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3answers
1k views

What is the point in having a debt ceiling when it can be relatively easily raised?

It makes some sense from a Machiavellian perspective; one can use the threat of a government shutdown to get concessions, but that's like playing chicken, and seems really irresponsible even if your ...
8
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1answer
818 views

When was the least bipartisan debt ceiling increase or suspension, in the past 30 years?

Pelosi said in an interview aired a couple of days ago (on Hill TV at least) that raising the debt ceiling has "always been bipartisan". Later, in the same video segment McConnell says ...
3
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2answers
285 views

What danger(s) does Chuck Schumer see in using reconciliation to increase debt limit?

Treasury Secretary Janet Yellen has said that if Congress does not raise the debt limit by mid-October, 2021, the U.S. could default, which could have macroeconomic implications. The Senate minority ...
6
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1answer
422 views

Can Congress really raise or suspend the debt ceiling through budget reconciliation with a simple majority in the Senate?

Some background info here The federal debt ceiling has currently been suspended until August 1. If this year so far is any indication, Senate Republicans will do everything possible to use a debt-...
1
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0answers
84 views

Is there a ranking of countries based on debt, with unfunded liabilities included?

The "Truth In Accounting" website claims that the US has $123 trillion of debt, if "unfunded liabilities" are taken into account. Is there a global ranking of states based on such ...
2
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1answer
171 views

What has Biden said about government debt?

It seems to me that Biden is spending a lot of money on new bills, and from my understanding of economics this means that government debt will greatly increase. Has Biden ever talked about this during ...
37
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3answers
10k views

Why are US student loans nearly impossible to remove via bankruptcy?

In the United States it is very hard to get rid of student loans. They cannot be discharged in bankruptcy except for under extenuating circumstances. I find that bizarre given how people are ...
4
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1answer
341 views

How are UK devolved nation’s budget deficits funded?

The Scottish Government has tax raising powers and, over the past several years, expanded spending powers too. However, I’m wondering how budget deficits for these devolved administrations are funded. ...
0
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1answer
196 views

How does one determine the source of funds (money) for a government expenditure?

When a government decides to spend money, they have 3 primary choices (please correct me if I'm mistaken): Spend money they already have (from taxes) Borrow money (from people/organizations within ...
25
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2answers
4k views

Is US Congressional spending “borrowing” money in the name of the public?

Watching the C-SPAN feed in regards to the American Rescue Plan, Rep. Tom Rice insists that we are "borrowing ~$5,500 for every man, woman, and child in [the US]." I remind the people back ...
3
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0answers
133 views

What specifically happens to a country when it defaults on its debt? [duplicate]

Background Back in March of last year, Lebanon defaulted on its debt and has since been in a state of abject discombobulation. But the effects of this just seem to add on effect to a country that is ...
6
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2answers
173 views

Which country is responsable for the external debt if half of the states of a country become independent? [duplicate]

After the lawsuit of 18 states joining Texas against some Democratic states (plus 2 counties from California/Nevada which want to become new states), and after that seeing some Texan republicans ...
15
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4answers
4k views

What does it mean when something is said to be "owned by taxpayers"?

There are 470,000 results on Google Search for "owned by taxpayers". Some excerpts: RBS remains 62% owned by taxpayers after a 45 billion pound bailout in the 2008 financial crisis. (...
8
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5answers
4k views

When the dictators execute the coup and become the head of the country do they pay the international debts of country?

There are so many coups happened in the history, and many of them in 20th century only, and after every coup a single man becomes the main head of the country, often called as dictator. My question is ...
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0answers
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Joe Biden's Student Debt Plan and Public Service

Joe Biden says he will cancel up to $10,000 dollars of student debt for those who are in public service. Most media outlets are defining public service as "schools, gov't jobs, and non-profits.&...
39
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5answers
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How does debt-trap diplomacy work?

Debt-Trap Diplomacy In the micro world of personal loans, a person will go to a bank, and say, for example: "Here's a contract: You give me $1 million, and I'll pay it back to you on XYZ schedule ...
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1answer
107 views

How effective would a student loan forgiveness program be if it only applied to governmental loans? [closed]

How effective would a student loan forgiveness program be if it only applied to Federal student loans, with private loans being exempt? For example, my student loans exceed $160k with less than $10k ...
27
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4answers
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Why does the UK government write off student loan debt after 30 years?

In the UK, if you haven't paid back student loans within 30 years they are written off. Why would the government institute such a policy? As far as I can see, it results in most people not paying back ...
20
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5answers
4k views

What are the consequences if a country decides to selectively cancel debt?

(Not sure if this should be on the Economics SE; however I am interested in both economic & political consequences) Trump threatens new tariffs on China as US mulls retaliatory action over COVID-...
20
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2answers
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How did the US bring down federal debt ratio after World War II?

I saw this infographic about the ballooning US Federal Debt-to-GDP ratio and how it might exceed WWII levels: https://www.bloomberg.com/graphics/2020-debt-and-deficit-projections-hit-records/ But I ...
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5answers
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What are the benefits of the proposed Euro/Corona bonds over conventional government bonds?

This article describes the efforts of several European Union countries to agree to issue "corona bonds" or "Eurobonds", which are a joint EU mechanism to issue joint debt shared between different ...
47
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5answers
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How is Japan able to sustain a large debt as a percentage of GDP, while Greece could not?

Japan is currently the nation with the highest debt as a percentage of GDP - at the time of writing it stands at over 250%. Greece, currently the second most indebted nation, went through a decade-...
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0answers
137 views

How does the public view financing policies by increasing the national debt?

A response to a comment here has caused me to wonder: how does the public view financing government programs by increasing public debt? To make this a more answerable question, I'm asking for answers ...
5
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1answer
191 views

At what point would US government lose control over its national debt? [closed]

From this wiki page we can clearly see that US national debt is growing steadily after 2010 and now it's larger than US GDP already (at the end of 2019). Still it's commonly believed the debt is ...
3
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1answer
359 views

Is there any European Union country that had or have a "debt brake" similar to Germany?

Germany has in place a "debt brake": In 2009 it was approved with a two-thirds majority both by the Bundestag and the Bundesrat. This decision will lead to public budgets without structural ...
49
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13answers
14k views

What are the downsides of being a debt-free country (no foreign national debt)?

I was only a child when the Romanian dictator, Ceaușescu announced that all of the country's foreign debt had been paid: Romanian leader Nicolae Ceausescu announced this week that his country, ...
5
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3answers
569 views

Why does the U.S. keep pushing "the debt trap" narrative in Africa when China is not the major source of debt distress in Africa?

https://static1.squarespace.com/static/5652847de4b033f56d2bdc29/t/5c467754898583fc9a99131f/1548121941093/Briefing+Paper+1+-+August+2018+-+Final.pdf We find that Chinese loans are not currently a ...
5
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2answers
471 views

What happens if a country redefines itself?

Consider the following possible scenarios for a country A: The legislature decides to change the name to B After a successful revolution or coup d'état, a new country is established having the same ...
10
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3answers
534 views

Why does the US federal debt increase by more than the US deficit each year?

I was looking through the Historical Tables from the Office of Management and Budget (https://www.whitehouse.gov/omb/historical-tables/). I noticed that each year the debt increases by a different ...
0
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1answer
157 views

What is the purpose of (student) debt forgiveness? [closed]

What is the purpose of student debt forgiveness? Which problem does it attempt to solve, and how does it go about solving it? Specifically, What is the problem? A student in debt is a person in debt ...
6
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3answers
510 views

Why does Berlin have debt issues in opposition to many other European capital cities?

According to this article Berlin seems to be a strange capital city when it comes to debt: In almost every European country the capital is the engine of the economy. But a new study shows there ...
7
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1answer
341 views

What would be the repercussions if Venezuela defaulted on Russia's loan?

Recently the Russian Ministry of Finance stated it expects Venezuela to provide payments on time. Given the U.S. has imposed sanctions against Venezuela, would the economic influence on Venezuela ...
-1
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1answer
101 views

Causes of a sovereign debt crisis?

What are the causes of a sovereign debt crisis? How can countries get out of a sovereign debt crisis?
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2answers
225 views

Could Italy's need to finance its public debt be a menace for the EU?

In the following article Italy’s populists turn to Trump and China it appears that Italian government is now seeking new alliances outside Europe to finance its debt, given that the ECB is coming to ...
5
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5answers
1k views

How long would it take to pay off the U.S. national debt if new deficits were eliminated?

If Congress stopped borrowing money, how long would it take to pay off the national debt? My question assumes—perhaps incorrectly?—that every dollar the Federal government owes must be paid back on ...
6
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5answers
727 views

If Jim, a random citizen, owes TD Bank $300,000 for his house mortgage, is this added to the U.S. national debt?

According to Wikipedia: National debt consists of two components. The first is Debt held by the public, such as Treasury securities held by investors outside the federal government, including ...
61
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10answers
17k views

What will happen if China stops loaning money to the U.S.?

US's external debt to china is a staggering 1.1 trillion US dollars and according to many economists, it's highly unlikely that U.S. will be able to pay back the entire external debt to China in the ...
4
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1answer
142 views

Does the US constitution have a clause/procedure for defaulting? [duplicate]

Current US debt stands at 20+ trillion. Is there there a clause or rules/procedures on defaulting in the US constitution? If so, how are the distribution of assets and liabilities handled?
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3answers
8k views

Do separatist nations inherit any national debt?

Do separatist nations inherit any national debt? For example, given Spain has a debt level of £1.1 trillion at the time of writing, if Catalonia becomes an independent nation is there any legal ...
3
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7answers
8k views

Can a country sell part of its land to pay off huge national debt?

I know that in history, countries have sold certain parts of their territories to other countries. If a country is in massive debt today, and they feel there is no way they can get out of it, and the ...
16
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2answers
2k views

How do Democrats "gain leverage" by a three month debt limit increase?

I'm trying to understand some of the comments in the press that Democrats have gained leverage by the three-month extension tied to hurricane relief. This is what I don't understand - it seems to me ...
10
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4answers
4k views

What are the stated downsides of allowing to default on college loan debt?

There are political positions in USA who advocate that people should be able to default on college loan debt (with the status quo being that it's very hard if not impossible to do so right now). What ...
8
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4answers
1k views

The US has done lots of Quantitative Easing, so why does it not do the same for its debt?

The US government owes lots of money. When US-based banks and other financial institutions faced a similar problem (ok, not a similar problem, but a crisis) - the US government, through the Federal ...
8
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2answers
1k views

Why did Japan not raise taxes instead of borrowing to avoid having such a large debt ratio?

According to this article, Japan reached an enormous debt/GDP ratio of about 250%. The first two answers from here illustrate more about the structure of the debt. My highlights are: most ...