If you had 34 trillion in debt and a centuries-long history of making on-time payments, you’d have a perfect credit score.
“Bankers hate him! Get an 850 credit score and dictate the terms and interest rate of your own debt using this one simple trick.”
Two things:
- if you owe the bank $34,000, it’s your problem; if you owe the bank $34,000,000,000,000, it’s the bank’s problem.
- its a big club, and you’re not in it.
Countries can print money. If the debt is denominated in your own currency you will never not be able to pay them.
I get your point, but they cant just “print” currency so we could actually not be able to pay when people/countries stop buying the bonds or lose faith in the system.
No, that is not true. That states sell bonds is a self-imposed rule.
As long as a state collects its taxes in its own currency there will be demand for that currency.
What happens when they run out of people to sell bonds to and they run out of money to tax?
Then stop selling bonds and start investing directly (build schools, repair bridges, pay your employees, etc.).
Countries don’t have to take the detour through state bonds because they can make money out of thin air. State bonds are a self-imposed and there’s no law of nature that mandates using them.
How do they make money out of thin air?
Serious question? Money today is nothing more than a number in an account. When a country needs more of its own currency, it can increase it’s account by that amount.
No they cant, that is illegal. You could say they will change the law so that they can do that, but that is not possible (in america) at this time.
