If They Can Pay off their Debts, Why Don't They?

[TakeItEasy]

When there is a strong economical relationship between countries, even if war starts, business still stays the business. For example, my country had war with Russia, lost its territories and people died but still, there is a very strong economical bond because we are neighbors and get cheap food and natural resources from Russia.
Btw I don't understand this debt thing: Greece, Italy and Spain have one of the highest debt burdens but people from my country immigrate to work in those countries while my country isn't in debt burden. This makes me to think that debt isn't as bad as they say. The only country where life is bad is Brazil from list.

When the war starts, how the economic condition of a country should be the way it was before? In a war, the country is suffering from wars, most countries don't make partnerships with them. After the war, the country didn't have the reputation that it had before. I have seen many countries after their wars, were almost destroyed and the countries that were their strong relatives helped them through money through food, but the relationship they had before, was different from now onwards.

The same is the case with my country, people mostly go out to other countries in search of their jobs, but the country in which I live has a debt burden. And also, go to those countries which have also a debt burden.

[Joshapat]

We will of course think that the country will easily pay off the debt, but if we enter the government which regulates finances then this is not easy, the state has of course made a daily to annual income and expenditure plan, and the debt is of course already included in that calculation so that if If you want to pay off debt, you have to take another budget, which is certainly not easy.

[odunybiz]

Below is a list of 10 Countries With the Biggest Debt Burdens¹

1. Japan $10.1 trillion
2. Greece $415.35 billion
3. Italy $2.94 trillion
4. United States $36.8 trillion
5. Spain $1.74 trillion
6. France $3.478 trillion
7. Portugal $305.45 billion
8. Canada $2.52 trillion
9. Brazil
10. Belgium $640.3 billion

I am not an economist so my question would be directed to those who understand economics and government administration. If a country is capable of paying off her debts, why don't they? Obviously , these developed countries I believe are capable of offsetting their debts because they even render aids to other developing nations.
Secondly, are there any benefits, economic or otherwise of a country being in debt?
1. https://www.usnews.com/news/best-countries/slideshows/top-10-countries-with-the-heaviest-burden-of-debt?onepage

I'm even surprise to see United State is included in the list. I don't think this debt has any reasonable effect on this country and this is why they aren't bother in paying this debt. Almost all the listed countries are capable of paying off this debt if they want to but may not pay it just because they have alot to attend to within the country.

[poodle63]

We will of course think that the country will easily pay off the debt, but if we enter the government which regulates finances then this is not easy, the state has of course made a daily to annual income and expenditure plan, and the debt is of course already included in that calculation so that if If you want to pay off debt, you have to take another budget, which is certainly not easy.

everything was already planned for long term, the government have so many experts at financial that I don't think every decision they make is a sudden decision, even taking up on a loan from another country usually also brings many benefits.
its just how macroeconomy works, so many things goes forth and some goes back, its all about suiting to the country's needs.
in other words, so many decision are being made with so many considerations in which also consider the well being of the country's economy not just out of speculation.

[dothebeats]

We will of course think that the country will easily pay off the debt, but if we enter the government which regulates finances then this is not easy, the state has of course made a daily to annual income and expenditure plan, and the debt is of course already included in that calculation so that if If you want to pay off debt, you have to take another budget, which is certainly not easy.

everything was already planned for long term, the government have so many experts at financial that I don't think every decision they make is a sudden decision, even taking up on a loan from another country usually also brings many benefits.
its just how macroeconomy works, so many things goes forth and some goes back, its all about suiting to the country's needs.
in other words, so many decision are being made with so many considerations in which also consider the well being of the country's economy not just out of speculation.

I think that should already be a give. A country's debt is a very serious matter and there are obviously a lot of things to consider, including where the money will go, why it is needed, how much, and where will get the debt from. Although it may seem like some decisions are too sudden for us citizens and we'll just suddenly be informed through news articles and posts online about the decisions and acts of our countries' respective governments, we should be aware that in reality those decisions and actions took a lot of time and long discussions between various sectors of the government and government officials before they come up with the end result that reaches our radar. To put it simply, we get the end product or the already summarized version hence the feeling of things seeming like they are too rushed or out of nowhere.

[Learn Bitcoin]

We will of course think that the country will easily pay off the debt, but if we enter the government which regulates finances then this is not easy, the state has of course made a daily to annual income and expenditure plan, and the debt is of course already included in that calculation so that if If you want to pay off debt, you have to take another budget, which is certainly not easy.

It's not like how we think. Just think about the stock market. If a company sells all its shares and cash out its money from the market, the market will be manipulated, and there is a chance for a market crash. This is why the government also has some rules in the stock market. When it comes to GDP and paying debt, a government cannot take money from all the profitable sectors to pay the debts. If they do, many projects won't be able to run anymore and will be closed due to insufficient funds. To rerun the project, they have to retake the loan. So, there is no need to rush to pay the debts while they have time to pay them by installment. There might be other reasons as well. But the mentioned one is the most significant.

[Pejoh Asu]

Debt is indeed something that seems difficult, sometimes we feel why there are countries or companies that are still managing debts even though they can be paid off immediately, especially large countries like the ones above, of course it is not difficult to immediately pay off these debts and I think the influencing factor is because the country also needs debt to make financial ratios look normal.

[jeha2015]

Debt is indeed something that seems difficult, sometimes we feel why there are countries or companies that are still managing debts even though they can be paid off immediately, especially large countries like the ones above, of course it is not difficult to immediately pay off these debts and I think the influencing factor is because the country also needs debt to make financial ratios look normal.

The initial function of debt is for leverage (debt for leverage), but if a country depends on debt and there is more debt but the growth is slower, it means the debt has failed, so the risk of debt default is higher.

It is true that every country needs debt to accelerate development growth, but if there is too much debt it means a country does not have sovereignty, as is the case on the African continent.

Sometimes I think, what makes all countries debt is because all countries that have a central bank must have debt. Because the central bank itself circulates money to the public through debt. Government bonds. Can it be called a Ponzi scheme that we agree and believe in?

[bakasabo]

I'm even surprise to see United State is included in the list. I don't think this debt has any reasonable effect on this country and this is why they aren't bother in paying this debt. Almost all the listed countries are capable of paying off this debt if they want to but may not pay it just because they have alot to attend to within the country.

Not only countries pay debts because they have "things to attend within the country". It is often creditors initiative not to get debt, but get something instead. Many people often see debt as an equivalent of money only. For example Japan that is leading the list. I am sure that Japan can pay their debt, but those who they owe, instead would ask for profitable import/export conditions in exchange of debt decrease. Consider debts as long term jockers one country could use against other. Instead of receiving money countries would accept special conditions or contracts from debtors.

[Learn Bitcoin]

Debt is indeed something that seems difficult, sometimes we feel why there are countries or companies that are still managing debts even though they can be paid off immediately, especially large countries like the ones above, of course it is not difficult to immediately pay off these debts and I think the influencing factor is because the country also needs debt to make financial ratios look normal.

This is not the reason, to be honest. The financial ratio does not matter. Think about your own business so you can understand better. Let's say you have some products in your store worth $5000 now and you can generate $20 profit per day by selling these products. After your sale, you buy again from this sale. Now, you took another $ 5,000 loan that will charge you $500 a year, and you can pay them in installments.

If you have $ 10,000 worth of products in your store, your daily profit will be $40 a day. Now let's calculate: If you generate another $20 profit per day, that will be around $7300 a year and your debt was $5000+ the service charge. I hope you get the match. The rate of interest varies from institution to institution. The profit ratio varies as well.

[jaberwock]

We will of course think that the country will easily pay off the debt, but if we enter the government which regulates finances then this is not easy, the state has of course made a daily to annual income and expenditure plan, and the debt is of course already included in that calculation so that if If you want to pay off debt, you have to take another budget, which is certainly not easy.

It's not like how we think. Just think about the stock market. If a company sells all its shares and cash out its money from the market, the market will be manipulated, and there is a chance for a market crash. This is why the government also has some rules in the stock market. When it comes to GDP and paying debt, a government cannot take money from all the profitable sectors to pay the debts. If they do, many projects won't be able to run anymore and will be closed due to insufficient funds. To rerun the project, they have to retake the loan. So, there is no need to rush to pay the debts while they have time to pay them by installment. There might be other reasons as well. But the mentioned one is the most significant.

The idea that governments have ot have zero debt is silly as well, that doesn't make sense at all. You make some money and you increase that income and the more income you have the more debt you could have. USA may have the highest debt ever, but has anyone checked if they have the highest revenue they ever had as well? If that is the case and they are making more, then it makes sense to have a lot of  debt and it wouldn't be a wrong move.

The bigger your revenue gets the bigger your debt gets, that is how you make both of them work. I understand that some people may approach it differently but you should definitely make sure that you are doing it the right way. I personally believe that they need to keep getting more and more debt, to increase their revenue more and more. If you could end up with something that would be a lot better if they do the right thing and use that debt to grow it though, otherwise just pure debt without any benefits would not be a smart move.

[Fortify]

Below is a list of 10 Countries With the Biggest Debt Burdens¹

1. Japan $10.1 trillion
2. Greece $415.35 billion
3. Italy $2.94 trillion
4. United States $36.8 trillion
5. Spain $1.74 trillion
6. France $3.478 trillion
7. Portugal $305.45 billion
8. Canada $2.52 trillion
9. Brazil
10. Belgium $640.3 billion

I am not an economist so my question would be directed to those who understand economics and government administration. If a country is capable of paying off her debts, why don't they? Obviously , these developed countries I believe are capable of offsetting their debts because they even render aids to other developing nations.
Secondly, are there any benefits, economic or otherwise of a country being in debt?

Those who can borrow the most money at the lowest cost are the winners in life, much like most of the countries on that list - but why did you squeeze Brazil on to the list without a number against it? Also, why is your list out of the correct order, it looks like you've just picked 10 at random which makes no sense because that would not make them the biggest countries with debt, take the UK for example with over a trillion dollars in debt - you've presented statistics that are poorly researched and wrong. Regardless, it doesn't really matter how much you borrow but rather the ability of paying back the debt or at least paying off the interest on it. That is what makes you a credible debtor country.

[Kelvinid]

I'm even surprise to see United State is included in the list. I don't think this debt has any reasonable effect on this country and this is why they aren't bother in paying this debt. Almost all the listed countries are capable of paying off this debt if they want to but may not pay it just because they have alot to attend to within the country.

Not only countries pay debts because they have "things to attend within the country". It is often creditors initiative not to get debt, but get something instead. Many people often see debt as an equivalent of money only. For example Japan that is leading the list. I am sure that Japan can pay their debt, but those who they owe, instead would ask for profitable import/export conditions in exchange of debt decrease. Consider debts as long term jockers one country could use against other. Instead of receiving money countries would accept special conditions or contracts from debtors.

We believe that all of these countries can afford to pay their debts but they choose not to because if we think deeply, this is also how they do business with other countries and gain trust.  In fact, those countries that have huge debts creates more projects and developments which means that through debts they will give more earning opportunity to the people. As the country wanted to improve its economic development, the more they committed debts.
Maybe I was wrong but they are not pressured to pay their debts which leaders don't bother to see how huge us their debts already.

[Victorybit1]

Well,most countries aren't able to pay of their debt because of the Greedy leaders in the nation. The money given to them to pay off the debt or rather the money they are suppose to use to pay off the debt,they use it for themselves and their families and end up collecting high taxes from the citizens which is very wrong

[The Sceptical Chymist]

well, i am only going to point to the opportunity Cost, Governments and often have competing priorities, such as investing in infrastructure, healthcare, education, and social programs. Paying off debt immediately would require diverting funds from these essential areas.

I understand the concept of opportunity cost, but if what you wrote is true then I'm left asking "Where the fuck do our tax dollars go?".  Those expenses above are usually taxpayer-funded as far as I know, and some of them aren't even at the federal government level but either state or even municipal levels.

And the question OP asked is one I've never asked myself; instead I've always wondered why countries get into so much debt in the first place (particularly the US, which is where I'm from).  The US debt is something I've been hearing about for decades, and I'm sure it's been an issue for longer than I've been alive.  I'm not sure if the US or the other countries in OP's list actually could pay off their entire debt all at once even if they wanted to.  I'm pretty sure that would mean whopping tax increases or some kind of financial chicanery that would wind up hurting the country rather than helping it.

It's sad.  This isn't even going to be my generation's problem, but the current gen's one and their kids' and grandkids' problem.  I would dread it if I were to live 50 more years, because I think the whole political landscape is going to be much different than it is today.

[Mauser]

I am not an economist so my question would be directed to those who understand economics and government administration. If a country is capable of paying off her debts, why don't they? Obviously , these developed countries I believe are capable of offsetting their debts because they even render aids to other developing nations.
Secondly, are there any benefits, economic or otherwise of a country being in debt?

You always need to ask yourself who is controlling the country and what would they personally gain from such actions. In most countries it's politicians in the government that control fiscal spending, but they usually only a few years in power and have to worry about reelections. Theoretically it would make a lot of sense for a country to reduce their debt levels during boom periods, because they can then cheaper take out loans during the next crisis. The problem is that this is not attractive for the politicians, they would need to cut back spending which is going to anger voters. For the government it's more attractive to keep spending high and make substitutes and gifts for various political groups. In economic terms it makes sense to have some debt for countries, because they can invest the money today to boost economic growth and repay the loans later when the economy is much stronger. This assumes the money is spend on profitable projects and not wasted. The optimal debt levels for a country is around 60% of GDP and not 100% like we are seeing at the moment.

[Dickiy]

Well,most countries aren't able to pay of their debt because of the Greedy leaders in the nation. The money given to them to pay off the debt or rather the money they are suppose to use to pay off the debt,they use it for themselves and their families and end up collecting high taxes from the citizens which is very wrong

I think this is not a strange problem in some countries in the world, it is difficult to find leaders who are truly honest and always fair in dividing every portion for their people, for example government aid funds which when in the data are very large but what reaches the community is only half or even smaller than that, things like that have happened very often and one of them is in my own country.

And for the debt problem itself, honestly this is very strange, even though tax revenues to the government are always smooth and maybe only a small part is problematic, but strangely the state debt is even more piled up when hearing from some local news, of course this is a big question for the community itself. In addition, it is not uncommon for us to find officials who are overflowing with wealth, even though we already know how and how much their salaries are given by the community, and if we calculate the wealth they have is far greater than their monthly salaries, of course this is not balanced, there is a game behind the scenes. Therefore, for the next time we must be really careful when there is a leader election.

[MFahad]

Well,most countries aren't able to pay of their debt because of the Greedy leaders in the nation. The money given to them to pay off the debt or rather the money they are suppose to use to pay off the debt,they use it for themselves and their families and end up collecting high taxes from the citizens which is very wrong

Leaders are not greedy all the time but if we think about it then we can realize that how tough this work is to handle the whole country. I don't think that all the time leaders are wrong because a leader cannot move forward against the rules and regulations of a country.

There are larger salaries of a country's leader that instead of his expenses he save lots of money thats why people think that a leader is stealing the country's money but we don't think how larger is the salary of a leader. A country's leader always thinks about the prosperity of a country as well as the citizens of a country but if citizens fails to achieve their wishes then they create wrong concept and spread negativity among others. We should think positive and realize the fact that managing all the things as a leader is not as simple as we think.

[Aanuoluwatofunmi]

Another observation to take note with those that also go in debt is that they will always struggles to make repayment back just to be able to have another one and therefore the whole thing turns a continuous process that as they are paying for one another is coming in, debt is one of the worst decision to make because it renders one under a particular subject for years if not generations.

[crwth]

Another observation to take note with those that also go in debt is that they will always struggles to make repayment back just to be able to have another one and therefore the whole thing turns a continuous process that as they are paying for one another is coming in, debt is one of the worst decision to make because it renders one under a particular subject for years if not generations.

It will go on for generations but definitely, there is something built for the people if it's a good governing body. There are a lot of people who are trying to make the country a better place if they have power to do so and having money being borrowed would give them that. For the country now, it's best that they give to the debt always but also have more so it is flowing. I think it is okay as long as it's being used correctly and not being corrupted by the people ruling the place.