Of course, there have been periodic crises that shake confidence in government's ability to repay its debts. At one time during the '08 (and ongoing) Recession, US government debt was yielding a higher rate of interest than the debt of solid blue chip companies. When this happens the risk of default and/or inflation is seen as higher with government debt than the best quality debt in the private sector.
Government debt clearly has an advantage over debt issued by corporations because it's 100% likely that 100% of the principal will be returned (and that the government debt could be sold in the secondary market before its redemption) upon maturity
Inflation can come from the over-production of money. And if the definition of money is indeed debt (as per the Grignon video), then too much debt makes the value of debt lower. A=B, and B leads to C, so C is the only possible outcome. Scarily, a debt-based economy can only be sustained by more debt.
Comparing personal debt to that of governments isn't all that different. In both cases, more borrowing means more interest to pay on that debt. Unlike people, governments retain the ability to borrow at far lower interest rates, if our nation is the example. Like individuals who borrow too much, governments who borrow too much eventually have two major issues--1) getting new loans gets to be harder and 2), the amount of interest it costs to carry old grows.
Unlike the individual who's tapped out sooner, governments can use their control over the issuance of its currency to postpone the consequences of carrying to much debt.
The quantity of American debt has no historical precedent. Populist notions of American exceptionalism make any alarms of pending limitations on our ability to issue debt sound preposterous, and are ritually avoided by policymakers for political reasons.
The cruelest aspect of government borrowing is imposing the government's debt on future generations. Imagine a feckless relative of yours saddling you with their debt, and your children, and their children. If individuals could behave like governments, we'd all be debt-slaves in perpetuity.
By racking up some $15 trillion in debt, with pending liabilities in the tens of trillions as Boomers go on Medicare, our government has enslaved future generations of Americans. Income that they earn will be taken through taxes, depriving them the benefit of their labor unless they can find some way pass the debt on.
Whatever their need to borrow, future Americans will be paying interest on debt their government created long before they were born, spent long before they could benefit from it. Infrastructure spending could be an exception; rebuilding roads and bridges has an ongoing benefit for 30 years or more.
Keeping the average American uninformed and ignorant is an essential part of sustaining the status quo, which is endless borrowing.
More government debt becomes unavoidable as a more and more spending goes toward paying interest on its debt. Should interest rates climb, the government would be forced to divert
more and more current revenue to pay interest which would in turn
increase the amount it needs to borrow to meet spending priorities.
The budget has many priorities and the bleating of sheep will just grow louder as the trough shrinks. It' unlikely that politicians will deny their own reelection prerogative by ignoring the clamoring demands of voters or campaign donors.
Unlike the individual debtor, government can simply synthesizing money--a process that can occur completely on computers, in digital form--to pay back its debt. Having a money-machine is undoubtedly a serial borrower's wet dream. Want some cash? Just print it up with the machine in back.
Lenders are wise to the scheme and will eventually bail out if the value of the currency collapses due to over-production brought on by too much spending and borrowing.
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