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153

I know that the population of Greece is much less than in the U.S., however I do not think it matters to people "lending" money to the governments This is where you are mistaken. The lender is concerned with the ability of the borrower to pay back the debt. If I have an annual income of $100,000, then all else being equal I can borrow much more than if my ...


81

There are some assumptions being made by this question that don't reflect how the international economic order works. Countries do not ever have to pay off all of their debt A nation's finances are not like a person's. A person has a finite lifespan, and creditors take this into account when giving a loan. A country does not have a finite lifespan, and ...


64

It's going to be difficult to really choose a "best answer" here since to some extent the factors involved, and especially which ones are "most important" is going to be a matter of opinion. And this is because economics is not a settled science in the way that physics or chemistry are, such that there are "correct answers." That said, while it has already ...


64

Their economies are radically different otherwise. Greece has a weak economy in most fields, with the exception of tourism. Japan is a manufacturing and scientific powerhouse. Greece runs recurring high deficits and had rarely, if ever, shown inclination to stop doing so. While Japan was criticized at the start of their financial decline for insisting on ...


62

Eliminating national debt is not necessarily a good thing because a country's economics are a lot less like personal finance and far more like business finance. Businesses (and countries) take on debt because they believe they can use the debt to spark growth far in excess of the interest on the debt. That's why using a personal frame of reference is ...


58

Writing the debts off after 30 years is a way of linking repayments to earnings, as well as negating the risk of the loan to the student. Loan repayments are usually made automatically as part of tax on your income, and no payments are required unless your income is over a certain level, currently around £26,500 - there is no legal way to avoid paying back ...


55

If the debt were to be transferred, it would be because of negotiations between Catalonia and Spain for Catalonia to take that debt on and at what level. It would seem reasonable to me for negotiators from Spain to ask for it, since supposedly the people of Catalonia might have contributed to it and since the Catalans are in essence asking Spain for ...


39

Greece has a higher debt-to-GDP ratio than the United States. Greece's debt-to-GDP ratio is 182% which is the highest in Europe and 2nd highest in the world. In comparison, the US's higher debt-to-GDP ratio is 126%, according to OECD data. General government debt-to-GDP ratio is the amount of a country's total gross government debt as a percentage of its ...


37

The simple answer is... there isn't one. A lot of this has to do with what the budget is spent on, and most of it is considered sacrosanct. Here's a Federal Budget Breakdown Defense - 16% Social Security - 24% Medicare and other health programs - 25% Safety net programs - 10% Interest - 6% Veteran and Retiree programs - 8% Education - 3% Transportation - 2%...


37

Because the Democrats are the minority in both houses of Congress and also lack control of the White House, they have extremely limited ability to push for any priorities they may have. The filibuster gives them some ability to prevent things they don’t want, but it’s imperfect and cannot be used to push for any policy, only to push against. So the only way ...


36

It would be a matter for discussion. When the Soviet Union broke up, Russia accepted the full foreign debt of the Soviet Union. This was restructured by the "Paris Club", and left Russia with a debt of about $60 billion. On the other hand, when Czechoslovakia split, the national property and national debt were shared, roughly in the ratio 2:1. This was a ...


36

To add to Gramatiks' excellent answer, the question makes another incorrect assumption, that China is somehow doing US a favor by lending money. On one hand, US clearly benefits by having more demand for its debt (and thus, duh, having the debt being cheaper - finance/economics 101). On the other hand, China is not doing this out of being nice, but of ...


33

It didn't. This graph is misleading. The red line is actually a percentage of the GDP. The GDP grew significantly after WWII (emphasis mine): The debt-to-GDP ratio hit its all-time record of 113% by war's end. Debt was at $241.86 billion in 1946, about $2.87 trillion in current dollars. Unlike after World War I, the US never really tried to pay down much ...


31

According to the Guardian, the debt is in the form of a bond. The government is redeeming some of the bonds, which is just to say that each bond holder will receive the value of their bond from the government. The money will go to each bond holder. Bonds are a literal physical document which can be redeemed for money. Bonds can be transferred to new ...


30

The reasons to contest land vary greatly, and one or more can be applicable in any given situation. Some land has strategic value. High ground, forward staging area, airplane landing ground, fleet base/port. Examples include Gibraltar, or Golan Heights, or Philippines. Falkand Islands were Royal Navy base in WWI and WWII. Crimea has Sevastopol. This gets ...


29

One little Japanese secret is this (alas the data was as of 2016): Of Japan’s net debt of 130% of GDP, about half (66% of GDP) is owed to the Bank of Japan, which the government in turn owns. By 2018 that percentage was down somewhat the BOJ owns about 45 percent of the 1 quadrillion yen Japanese government bond (JGB) market, crowding out banks and ...


29

Future lenders know that the borrower doesn't always pay. They will take that into consideration when they give future loans. More risk-averse lenders will not deal with the unreliable borrower at all, while greedy ones might do so with a risk premium on the interest. That means future credit becomes more expensive. The Eurozone is a good example because ...


26

We had "nearly" paid of the national debt in 1980. It was just below $800 billion at that point, after Truman began paying off WWII and the Great Depression: Reagan: 1980 was 907B - added $2.1T, up 275% in 1988 to $3T Bush I: 1988 was $3T - added $1.8T, up 63% in 1992 to $4.8T Clinton: 1992 was $4.8T - added $1.2T, up 22% in 2000 to $6T Bush II: ...


26

Expanding on the answer by Tin Nguyen, the Euro is a a common currency for nations with separate economic policies and separate national debts. Being a member of the Eurozone stops nations from devaluating their currency to compensate for changing economic fundamentals. Before and during the 2007 financial crisis bonds from e.g. Greece or Italy had a risk ...


25

They shutdown because they didn't have a budget, and the law limits what a US Government agency can spend if they don't have a budget. They can provide certain essential functions: air traffic control, border security, food inspections, military,...; but not other non-essential functions: national parks, department of education, large portions of NASA. This ...


25

The United States would do what any other nation would do: Borrow the money from someone else. Either from other governments, from private banks or from private people. Governments do this by issuing government bonds. These are openly traded financial instruments. The government motivates people to buy these from them by guaranteeing an interest rate. When ...


25

When student loans were first set up in the 90s, they were only to cover the cost of living (food, accommodation, clothes, etc.). At that point tuition was still free, and there was still some grant funding in place too. Students like myself graduated with £10k of loans or less. The government envisaged that some students would fail to pay it off, but they ...


24

Alexander Hamilton believed (and convinced George Washington) that a little national debt (not the massive amount we have now) is a good thing. By being in a little debt, the countries that we owe money to would defend us in war because they don't want to lose their investment. Also, as long as we pay back the debt, with interest, other countries are more ...


24

The stated aim of austerity is to promote economic growth, which ultimately would allow reduction of the UK national debt relative to GDP. From the budget speech given by George Osborne, then Chancellor of the Exchequer, to the House of Commons on 22 June 2010: Some have suggested that there is a choice between dealing with our debts and going for growth. ...


22

Who owns the debt? People and organizations who want to own what has historically been a rather stable investment for most countries. This also differs somewhat from country to country. In Japan, the second largest owners of debt are citizens in the form of postal savings. The largest is the central bank. In the United States, debt owed to the ...


21

There are four correct answers to this question, here presented in increasing relevance: If you look at the US debt in dollar terms, the last president to reduce debt over one fiscal year was Eisenhower, who did reduce debt in the two fiscal years 1955-1957. However, during his two terms, debt increased with more than 20 billion dollars, and your question ...


21

The other answers address the legal reasons for the shutdown, so I'm going to address this part of the original question and the misconception about the role of the Federal Reserve. I understand that the current Federal Bond Buying program (80 Billion a month) are allowing a fixed supply of money to the American Government. This is incorrect. The Federal ...


18

To add to Lennart's already great answer, there is a fifth "correct" answer to the question: .5. It is irrelevant. In USA, the budgetary authority rests solely on the Houses of Congress (House of Representatives and Senate). As such, no US President can increase or reduce debt. Only the Congress can. (obviously, the President can have influence on the ...


18

Looking at both pros and cons: For countries (and partially for individuals), debt is not a problem if the debt (and interest) you accrue today result in higher income than both combined tomorrow. As a simplified example for an individual, you take up a loan of a million euros at 2% p.a. and while paying it off you make 4% profit p.a., so you come out with a ...


18

Quick answer: GDP growth plus inflation were responsible for cutting the debt-to-GDP ratio rapidly after WWII. Exactly how much each of these contributed seems actually a non-trivial (modelling) problem. In general, it's not controversial that inflation (also) reduces the debt-to-GDP ratio. Additionally, the so-called "financial repression" of the ...


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