mikeholczer t1_j28dx9h wrote
A country being in debt is not a problem in and off itself, there are plenty of posts on this sub that go into that, so I won’t here, but what is a problem for an economy is if faith is lost in the currency and printing that much money would certainly do that. Money doesn’t have any value in and off itself, it only has value because we believe it does and that its a stable way to trade value. If the county is willing to create huge amounts at will to pay debt that erodes that faith in stability.
Derikoopa OP t1_j28e8yp wrote
Couldn't the argument be made that a ridiculous amount of debt also reduces faith in the currency?
mikeholczer t1_j28efo0 wrote
If the debt was past due maybe, but that would be because the country couldn’t pay its debts not that it had them.
A_Garbage_Truck t1_j28p66m wrote
debt for a nation is not the same as for an individual.
the kind of debt nations want ot have is the one that is created in the effort of improving its own infrastructure and industry, whihc would in turn allow the nation ot generate Wealth that can be used ot pay off said debt(at the veary least pay off the interest)
bad debt for a nation is the one that is created ot do anythnig else other than that.
in this situation the only way you lose faith in the currency is if the nation itself experiences such crippling economical collapse that it makes all major investors panic, resulting in them cahing in to pack their sht and leave.
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