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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21 votes
2 answers
5k views

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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9 votes
5 answers
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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 ...
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3 votes
1 answer
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What exactly are the formal rules around US paying off debt?

Is there a precise set of rules (e.g., very specific law, or court ruling?) that explains what specifically does - or does not give the US executive branch the right to choose to default on specific ...
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59 votes
10 answers
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 ...
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50 votes
3 answers
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 ...
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20 votes
2 answers
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What happens if a country becomes bankrupt?

What happens to the citizens of the country? What happens to the sovereignty of the country? What happens to the neighbors? For example, what will happen if Greece becomes bankrupt?
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15 votes
5 answers
3k views

Do Western countries want for Russia to default or not on its foreign debt?

According to TASS, Russia should be able to avoid defaulting on its foreign debt because now, as opposed to 1998, it has enough financial reserves. However, the issue is that a big fraction of its ...
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14 votes
4 answers
2k views

Implications of governments borrowing from a central bank rather than issuing money directly

Early in the history of the United States the political battle was fought between those who favored a strong central bank of the United States and others who felt the government reserved the right to ...
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11 votes
5 answers
6k views

What is the debt ceiling and what happens if we reach it?

Over the past few years, there has been debate in congress as to whether or not to raise the debt ceiling. My question is simple(the answer to it might not be): What Is the debt ceiling, under what ...
3 votes
1 answer
246 views

What effect does state-level refusal to accept the ACA's medicaid expansion have on the ACA's cost?

The Affordable Care Act ("Obamacare") was projected by the Congressional Budget Office to reduce the national deficit. When Obamacare went to the Supreme Court, the court ruled that it was ...
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31 votes
4 answers
18k views

Who was the last US President to oversee a reduction in debt?

As of 2012, the United States currently has ~16 trillion in debt. The last five presidents have all added to the overall debt*. Who is the last US president to decrease the total amount of debt ...
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29 votes
3 answers
9k views

Has Russia actually defaulted on its foreign debt as of April 11, 2022?

An article from CNN starts out by stating that Russia "has defaulted on its foreign debt", but then appears to qualify the statement by observing that "Moscow has a grace period of 30 ...
26 votes
3 answers
8k views

Are there any negative consequences for a country having no debt?

It would seem that having no debt would categorically be a good thing. I have heard Dave Ramsey say many times that: The Forbes 400 is a list of the richest 400 people in America as rated by Forbes ...
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25 votes
3 answers
7k views

What is Trump's plan to get the United States out of trillions in debt?

The debt is now close to 20 trillion dollars. What are Trump's main strategies to reduce this debt?
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24 votes
7 answers
9k views

Why is it considered acceptable to freeze Russia's foreign reserves, but not acceptable for Russia to default on their debts?

Currently the following things are true: Western countries have frozen most of Russia's foreign currency reserves Russia is either in default or would be soon However #1 is seen as fair and ...
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23 votes
3 answers
4k views

Who is lending the money for a nation's debt?

It seems most governments (certainly the US, Europe, Australia) have racked up a national debt - but who are the lenders that these governments are indebted to? Where does the government get the ...
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21 votes
3 answers
4k views

Why do governments still assume that "the more land, the better"?

There is constant political struggle for land between two or more nations around the world, where two different countries claiming to own a land area even though another country controls (or "occupy") ...
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18 votes
4 answers
1k views

What are the practical effects of having too large a debt load?

My understanding is that Japan has a debt-to-gdp ratio of approximately 200%. It is considered to be one of the worst in the world. The United States is only in the 100% range. What effects would ...
16 votes
2 answers
3k 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 ...
15 votes
3 answers
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Why did Russia default on its domestic bonds in 1998 when it could simply print money?

Russia defaulted on its domestic debt in 1998. It did not have to do so because the bonds were denominated in Russian Ruble and the government could simply have printed money to pay the bonds. Why ...
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13 votes
2 answers
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Where did all this deficit come from?

Back in 2008, the deficit was somewhere around $200 billion, until the bank bailout, which was reported at first to be a 1-time bailout of $800 billion. The next year, there was the Stimulus package, ...
12 votes
8 answers
2k views

Why do US politicians spend so much on campaigns when the salary is not high enough to justify the expenditure?

Hillary Clinton spent so much on her 2008 presidential campaign that she had a campaign debt of over USD30m. The annual salary of a US president is only USD400k. Even if Hillary were successful, the ...
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11 votes
1 answer
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Has any government made the unwinding of their US bonds and currency reserves a core public policy plank or a legal requirement?

The betting odds (at time of writing) on a partial US debt default this year were 6/4 - Default and 1/2 - No Default. Considering the odds, this is something of a wake-up call for nations and ...
11 votes
2 answers
817 views

What prevents the U.S Congress from adopting a capital budget?

Most American states are required, by law, to balance their budgets. As a result, they do - to a large extent. The United States federal government, however, does not, and has not for many years. ...
10 votes
3 answers
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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 ...
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9 votes
1 answer
621 views

Did any legislation ever prohibit fractional reserve banking by introducing something like the Chicago Plan?

The Chicago plan involves to impose a 100% reserve on banks, so that banks can no longer create money by lending out. Recently, IMF published a note called The Chicago plan revisited. I'm no economist ...
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9 votes
2 answers
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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 ...
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8 votes
2 answers
238 views

Eurozone countries surpassing their allowable deficit of 3% GDP

What happens when a eurozone country breaks EU fiscal rules that limit the allowable deficit to 3% of GDP?
6 votes
5 answers
409 views

What steps can be taken to combat unfunded state and federal pension liabilities in the U.S.?

It's the growing problem that no politicians want to talk about: unfunded pension liabilities. Business Insider ran an article last year which focused on the many upcoming challenges facing U.S. ...
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6 votes
1 answer
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What would the National Debt's minimum payment warning notice read?

The CARD Act modified what credit cards need to disclose to you on your monthly statements. One requirement was a Minimum Payment warning: Minimum Payment Warning: If you make only the minimum ...
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5 votes
2 answers
484 views

Is there legal recourse for creditors if Treasury defaults on any (not necessarily all) of its debts?

This is a follow up to a previous question I had here Fed Authority I understand that once the government goes into default it triggers a number of different legal steps and procedures, such as CDS ...
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5 votes
2 answers
624 views

Why focus on reduction of public debt when private debt is much larger?

According to the OECD, in The Netherlands, public debt is 78% of GDP and private household debt is 277% of GDP. Eurozone rules require a budget deficit of no more than 3% (not sure if this depends on ...
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4 votes
2 answers
438 views

Is Hillary Clinton on the hook for the $30 million debt of her campaign?

In Why do US politicians spend so much on campaigns when the salary is not high enough to justify the expenditure?, it is mentioned that Hillary Clinton has $30 million of debt from her 2008 campaign. ...
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4 votes
2 answers
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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 ...
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3 votes
0 answers
142 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 ...
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0 votes
0 answers
155 views

Did China make pledges to former Philippine president Rodrigo Duterte that could be described as a "trap"? If so, which were most attractive to him?

In a May 11, 2022 tweet, (self-described "public educator, academic, columnist, and policy adviser") Richard Javad Heydarian1,2 first asserts that China took the previous Philippine ...
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