159
votes
Why is Greece's debt considered a problem but not US debt, which is much larger?
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 ...
- 11.4k
81
votes
What will happen if China stops loaning money to the U.S.?
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 ...
- 10.5k
66
votes
Accepted
Why is Greece's debt considered a problem but not US debt, which is much larger?
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 ...
- 1,820
63
votes
Accepted
What are the downsides of being a debt-free country (no foreign national debt)?
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 ...
- 2,441
63
votes
Accepted
How is Japan able to sustain a large debt as a percentage of GDP, while Greece could not?
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 ...
59
votes
Why does the UK government write off student loan debt after 30 years?
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 ...
CDJB♦
- 105k
59
votes
Why are US student loans nearly impossible to remove via bankruptcy?
I don't think there's a clear and definitive reason. The Nondischargeability of Student Loans in Personal Bankruptcy Proceedings: The Search for a Theory by John A. E. Pottow of the University of ...
JJJ♦
- 38.9k
51
votes
Accepted
Is US Congressional spending “borrowing” money in the name of the public?
It is true that the money has to be repaid, but this perhaps misses some important points:
The money borrowed is real, the debt has to be repaid (or else the US defaults or devalues the dollar, both ...
- 115k
48
votes
Accepted
Why first world countries have astonishing amount of foreign debts, but third world countries don't?
Because a debt to GDP ratio is usually the wrong metric.
The terms "first world" and "third world" are imprecise and not unproblematic for other reason, but they typically ...
- 13.6k
40
votes
Why is Greece's debt considered a problem but not US debt, which is much larger?
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 ...
- 46.5k
40
votes
What will happen if China stops loaning money to the U.S.?
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 ...
- 91.8k
40
votes
Accepted
Why is it considered acceptable to freeze Russia's foreign reserves, but not acceptable for Russia to default on their debts?
"most of Russia's foreign currency reserves" is not accurate. Only about half were frozen; TASS and Reuters agree on this figure. That still leaves hundreds of billion of dollars with which ...
- 145k
38
votes
What is Trump's plan to get the United States out of trillions in debt?
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 ...
- 45.6k
37
votes
Accepted
How do Democrats "gain leverage" by a three month debt limit increase?
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 ...
- 3,359
37
votes
How does debt-trap diplomacy work?
No, China is unlikely to invade any countries which refuses to pay their debt. No, they will do something far worse: They will tell the rating agencies!
Every government has a credit rating assigned ...
- 74.8k
36
votes
Do separatist nations inherit any national debt?
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 ...
- 115k
36
votes
Why first world countries have astonishing amount of foreign debts, but third world countries don't?
what is the relation and connection between a state being a first world or a third world, with the amount of foreign debt they are immersed in?
The wealthy countries usually have a long history of ...
- 668
35
votes
Has Russia actually defaulted on its foreign debt as of April 11, 2022?
No - Russia has not currently (April 11th 2022) defaulted on its sovereign debt. What the CNN article is referring to is S&P’s downgrading of the country’s credit rating to ‘selective default’. ...
CDJB♦
- 105k
35
votes
What is the theory behind using the 14th Amendment to ignore the debt ceiling?
The debt ceiling fight is about funding and permitting the government to pay for costs and debts that have already been incurred by prior duly passed legislation. It is not, intrinsically, a fight ...
- 16.5k
34
votes
When the dictators execute the coup and become the head of the country do they pay the international debts of country?
Sovereign debt is not cancelled by a change in regime. But sovereign nations cannot be compelled to do anything.
If I have a personal or business debt that I can't or won't pay, then there is a ...
- 115k
34
votes
Accepted
What does it mean when something is said to be "owned by taxpayers"?
I'm afraid that in all the cases I know of, that is a figurative rather than literal statement. Specifically, in the case of RBS, it is "owned" by NatWest group (as subsidiary company) which ...
- 21.1k
31
votes
Accepted
When a government pays centuries old debt... who exactly is it paying?
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 ...
- 23.8k
30
votes
What are the consequences if a country decides to selectively cancel debt?
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 ...
- 106k
30
votes
Why are US student loans nearly impossible to remove via bankruptcy?
The limitations on the discharge of student loans was hardened in the 2005 Act but long predates it.
The basic notion is that the education that you receive in exchange for a student loan is not ...
- 73k
30
votes
Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?
The debt ceiling is an accounting technicality that is being hijacked by the Republicans to gridlock the political process.
First, Congress authorizes a budget with spending programs and tax laws for ...
- 106k
29
votes
How is Japan able to sustain a large debt as a percentage of GDP, while Greece could not?
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 ...
- 145k
29
votes
Is US Congressional spending “borrowing” money in the name of the public?
When Congress spends money, is that money borrowed for the citizenry
as he claims? I guess the bigger picture question I have is that if
the government spends $2 trillion, is the citizenry expected to
...
- 73k
27
votes
Who is lending the money for a nation's debt?
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, ...
- 89.3k
Only top scored, non community-wiki answers of a minimum length are eligible