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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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-4 votes
2 answers
171 views

Why are governments allowed to take on loans knowing that their successor will need to repay them?

For example, if public polls show that a government will likely lose the next election, then it might be pretty rational for it to take on loans. A lot of them. Then, it could finance welfare spending ...
8 votes
6 answers
1k views

What are the guarantees that international debt will be paid back ever?

Related: Are there any negative consequences for a country having no debt? USA never confiscated Nazi Germany's gold despite being at war Why would a country ever allow another country to be deeply in ...
8 votes
7 answers
10k views

Does Japan have any reason to ever repay its debt?

https://fortune.com/2015/02/26/japan-economic-time-bomb/ Takatoshi Ito, an economist at Columbia’s School of International & Public Affairs, argued at a panel discussion on Monday that unless the ...
5 votes
3 answers
419 views

How could it be that the head of a Russian region asks officials to pay off debts of its residents?

As someone who has learned Russian, I read news from Russian news agencies from time to time, and one of them is TASS, a state-owned news agency, which has recently published a news article that left ...
11 votes
10 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 $30 million. The annual salary of a US president is only $400,000. Even if Hillary were successful, ...
5 votes
3 answers
515 views

How is China's municipal debt problem different from that of the U.S.?

https://www.reuters.com/markets/asia/china-can-no-longer-extend-pretend-municipal-debt-2023-08-06/ Most economists expect Beijing to instruct state-owned banks to keep rolling over maturing debt with ...
3 votes
0 answers
102 views

What happens to the national debt if a country breaks apart? [duplicate]

How does the debt get split up when a country breaks up? If, for example, Quebec were to separate from Canada, Quebec would probaly argue that it has no obligation to repay the debts to the Canadian ...
52 votes
3 answers
9k 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 ...
5 votes
0 answers
101 views

Is fiscal responsibility more difficult to practice in China since most of the spending is done by local governments? [closed]

Local government debt reached 92 trillion yuan ($12.8 trillion), or 76% of economic output in 2022, up from 62.2% in 2019. Part of it is debt issued by local government finance vehicles (LGFVs), which ...
1 vote
0 answers
79 views

Did China bail out its local governments in 2011?

There's this rumor-ish CNBC piece from 2011 (which is actually quoting Reuters on this part) claiming that: China’s regulators plan to shift 2-3 trillion yuan ($308-463 billion) of debt off local ...
0 votes
1 answer
120 views

Apples-to-apples comparison of the public debt structure in the US vs. China

I'm looking for a comparison (i.e. two pie charts) of the public debt structure in the US vs. China. I can easily find data on the [hidden] municipal debt problem in China (as it's been repeatedly in ...
1 vote
1 answer
114 views

How do you measure debt sustainability (private and public)?

How do you measure debt sustainability (private and public)? https://en.wikipedia.org/wiki/List_of_countries_by_government_debt China has a lot public debt to gdp ratio. China’s debt is more than 250 ...
0 votes
5 answers
533 views

How much in interest payments since 2002 has the increase in the debt past the old debt ceiling cost the US?

Wikipedia notes several recent changes to the debt ceiling. Increases in the debt ceiling allow the Treasury to borrow more money and increase the national debt to a level higher than previously ...
18 votes
12 answers
6k views

Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?

Every year in the United States, there is usually a disagreement regarding the raising of the debt ceiling, which was especially noticeable in 2013 when it caused a government shutdown. Why is raising ...
4 votes
1 answer
185 views

US Census Survey doesn't seem to ask about most debt-- How is US Gov't getting debt info?

I just received a 2023 American Community Survey from the U.S. Census Bureau, which took over an hour to fill out. The survey asked a slew of questions, in order to "give our country an up-to-...
3 votes
2 answers
250 views

Does the debt ceiling have any purpose? [duplicate]

The debt ceiling was created, more or less, by mistake - a remnant of a program where the other half was ruled unconstitutional. Less debt is better than more debt, but the only thing the debt ceiling ...
3 votes
1 answer
156 views

Can someone explain the debt ceiling clearly? [duplicate]

Now that we've gotten past the debate over raising the debt ceiling, so the world economy isn't going to hell next week, could someone explain it clearly? Most news sites describe it by analogy with a ...
0 votes
1 answer
228 views

social security vs debt ceiling [duplicate]

If social security funds are held in a trust fund, why would not raising the debt ceiling impact social security payments? Wouldn't the trust fund be paying the beneficiaries from its reserves? At ...
16 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 ...
18 votes
2 answers
7k views

What is the theory behind using the 14th Amendment to ignore the debt ceiling?

President Biden raised a few eyebrows in that he's said he isn't ready to invoke the 14th Amendment and ignore the debt ceiling... yet. From Reuters President Joe Biden said on Friday he was not yet ...
3 votes
1 answer
297 views

What would happen if the US exhausts extraordinary measures, debt limit is not increased, and Treasury decides to ignore limit and issue new debt? [closed]

Treasury Secretary Yellen said this would be a "constitutional crisis". What would that entail? Would it be up to SCOTUS to tell the executive it can't do that? And then SCOTUS would what... ...
14 votes
3 answers
7k views

Why didn't Democrats get rid of the debt ceiling while they were in power?

Since 1995, Democrats and Republicans have been in constant disagreement over the debt ceiling, with Democrats wanting to raise it and Republicans resisting their efforts. During this time, Democrats ...
8 votes
1 answer
187 views

How can central government intervene when a council declares itself bankrupt?

As quoted by the Guardian and a local news website, Woking borough council is on the verge of bankruptcy (due to failed investments and financial mismanagement.) To put in context how much debt the ...
4 votes
2 answers
433 views

Since the West will no longer allow Russia to raise money by selling sovereign debt, what alternatives does Russia have?

are there any precedents of this ? What is generally the alternative in such cases ? Do other authoritarian countries help you finance debt ?
1 vote
2 answers
612 views

What benefits does China gain by waiving debt to African countries like this?

https://www.fmprc.gov.cn/eng/zxxx_662805/202208/t20220819_10745617.html What benefits does China gain by waiving debt to African countries like this? Second, we need to take concrete actions to ...
13 votes
3 answers
6k views

Why all the warnings about failure to raise the U.S. debt ceiling when some argue that Biden could just ignore it?

In this article at CNN, Robert Hockett, a law professor at Cornell University says that the debt ceiling was rooted in the 1917 Liberty Bond Act which was rendered obsolete in 1974. Part quote from ...
11 votes
1 answer
303 views

Is there a way to determine if a country engages in debt-trap diplomacy?

Is there a way to determine if a country engages in debt-trap diplomacy? There are people accusing China in engaging in debt-trap diplomacy, but China keeps renegotiating and cancelling debt while it ...
41 votes
4 answers
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 ...
10 votes
4 answers
852 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 ...
2 votes
0 answers
56 views

What proportion of Chinese lending to Africa is interest-free, according to the World Bank?

I'm trying to figure out if some figures put out by Johns Hopkins CARI (China-Africa Research Initiative) in a WaPo piece include (or don't) the so-called "hidden lending" that China ...
1 vote
3 answers
252 views

Has any government ever implemented a break-even tax policy?

I was reading Strong Towns by Charles L. Marohn Jr. In it, he describes how cities must have revenues that exceed expenses in order to survive. However, in his experience, most people react to the ...
10 votes
1 answer
2k views

Why are student loan interest rates tied to inflation, not central bank interest rates?

In the UK, student loan interest rates, once studies are finished, are set as Retail Price Index (RPI) plus up to 3%. Every other variable rate of borrowing that I am aware of is tied to central bank ...
16 votes
3 answers
3k views

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 ...
1 vote
1 answer
352 views

How did the alleged Chinese debt trap cause the economic crisis in Sri Lanka?

Sri Lanka is facing the biggest economic crisis since its independence. Its policy was wrong in some cases: Chinese debt trap. Due to lack of industrial growth, the Government of Sri Lanka provided ...
30 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 ...
24 votes
7 answers
10k 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 ...
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 ...
6 votes
1 answer
263 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 ...
34 votes
4 answers
8k 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 ...
11 votes
2 answers
870 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. ...
3 votes
1 answer
349 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?
-1 votes
2 answers
189 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 ...
29 votes
2 answers
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 ...
3 votes
0 answers
146 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 votes
1 answer
191 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 ...
10 votes
3 answers
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 ...
9 votes
1 answer
836 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 ...
4 votes
2 answers
298 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 ...
7 votes
1 answer
455 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-...
2 votes
1 answer
198 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 ...