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

[Mahanton]

The loan is based on their repayment capacity,if one person getting loan for 1 million dollars,he had a capacity to multiple their money to 2 million with a short period of time.So the developed countries had huge capacity to repay the loan at any point.So they getting the loan just for the funds rotation.The developed countries also use the loan money to multiple to double or triple money.This will help their country to increase their economic activities.By this techniques most of the developed countries still multiple their earnings.

Totally on point and i should say that this is really the main reason on why they do really take some loan but its really that impossible that they wont really be reconsidering on borrowing an amount on which they cant really be able to pay but of course it would really be applied into those places or countries which does really have that kind of capability unlike into those third world or other countries which borrowing out but the capacity on  giving it out again or paying is really that hard but as long those loaned amounts is being used on building up something that would really be generating that kind of development on towards their economy then it is really that worth. Basing up on the list then those countries are indeed top ranking in terms of economic status and its not an issue no matter how big those numbers are as long they are really that capable on repaying if they wanted to but its dumb to make out such action considering that you would really be tending to make use of those other amounts for further developments on which they do know that it could bring out more money that circulates
or simply that they could really be able to benefit more.

[Kakmakr]

A lot of those countries cannot keep ahead of the debt... because their expenditure are way more than their income. They might pay off some debt and then they have to borrow again to fund whatever government project or crisis that happens. 

The first world countries are eager to give them loans, because it gives them leverage to get the things that they need for their country. They will then take control over things that generate income or profit for them. 

[serveria.com]

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

Countries like the US are paying record interest on their debt, and I really don't think they're capable of shelling out $36.8 trillion!!! just like that. I doubt that this debt will ever be paid off in full or even partially. A debt-to-GDP ratio up to 77% is considered "normal" but US debt has reached a whopping 125% debt-to-GDP in 2021 (now probably even higher).

[topbitcoin]

I am sure that the countries you mentioned above are able to pay off all their debts because this is a responsibility and obligation, but they also look first at several aspects that must be prioritized and paid attention to rather than paying off all their receivables. but here I will also convey things that can cause a country to fail to pay its debts, including the absence of economic improvement in that country so that the country does not have more budget to be able to pay its debts, and then this can also be caused by political instability in the country This is because a policy issued by the government can have a big impact on improving the economy in that country.

And if you still remember what happened in the last year there was an incident where Russia failed to pay its debt, this was not because Russia did not have enough money to pay the bill, but rather the political conditions and international cooperation with other countries were not going well. . where Russia received several economic and other sanctions due to Russia's invasion of Ukraine. So these sanctions make it impossible for Russia to make payments to international creditors.

[famososMuertos]

OP, Well, you don't need to be a Harvard Graduate Economist to understand it, in fact those who ask for credit the most are the ones who have the most money, as someone who once had a lot of money told me, in lost conversations in an afternoon with a friend, but which stays with you forever, and I'm here remembering her, "why use my money if I can use someone else's money..."

Obviously it is a double-edged sword for entrepreneurs and ordinary people, but they are based on assets and liabilities, one can go into debt as much as one has the ability to pay... that is the brutal amount of money in that top 10.

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.

Essentially it is ... it!

[poodle63]

A lot of those countries cannot keep ahead of the debt... because their expenditure are way more than their income. They might pay off some debt and then they have to borrow again to fund whatever government project or crisis that happens. 

The first world countries are eager to give them loans, because it gives them leverage to get the things that they need for their country. They will then take control over things that generate income or profit for them. 

I think a country might needed those loans for infrastructure because they need it immediately not that their expenditure way more than their income but because allocation of money for that certain infrastructure is minus therefore they need to take a loan even though honestly they could easily build the infrastructure with the income of the country itself.
there's reason why country like japan and the other developed country despite the fact that their income level is as higher as it can get still taking loan is i'm sure because something else.
not entirely because their expenditure is more than their income. but i could be mistaken.

[Synchronice]

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

Imagine you have 100 million USD debt and now you have collected money to pay that debt. But here is the thing, what about to invest this 100 million USD into something that will bring ten times more profit in near future? For example, in tech? In medicine? Imagine country invested in hairloss treatment and invented a medication that cures it, can you imagine how much money can be made? When you pay loan, you are stepping yourself down and have to wait for decades to collect money to invest in something.
That's just what I think. To be completely honest, my specialty is finances but I still don't understand how this debt between nations work. It's complicated shitshow, it is illogical that everyone is debt. Whose debt do these countries have? A debt of each-other is a paid and not a debt but it's complicated.

You can have one quadrillion in debt, if the others also owe you one quadrillion it means you have a zero balance, but still your debt is one quadrillion. But god forbid doomsayers look at this detail!

Why don't we just reduce it to zero? I owe you one billion, you owe me one billion, this means that debt doesn't exist and is already paid but it doesn't work that way between nations. They say the safest loan is when country borrows money from another country but once I saw that the whole world is in debt, then I started to think, since no one pays their debt, how is this the safest loan?

[stompix]

Why don't we just reduce it to zero? I owe you one billion, you owe me one billion, this means that debt doesn't exist and is already paid but it doesn't work that way between nations. They say the safest loan is when country borrows money from another country but once I saw that the whole world is in debt, then I started to think, since no one pays their debt, how is this the safest loan?

Because when you take a loan as a country you have a repayment plan and you do this based on 5-10 years in advance budgets, everyone rushing in exchanging debt maturing over 6 years at x% with one over 7 and a half at z% interest would be a complete nightmare which wouldn't serve as much as you think other that stoping a bunch of guys screaming all day about the size of the debt.

But I don't understand why you say "no one pays their debt", everyone pays their debt right now except for some 3rd world countries, it's not like the US or any other country has a fixed debt and they are just adding money on top of that, the US is paying previous debts, Germany is paying previous debts and they are both taking new ones if the market is good enough for them.

If you're able to do a thing like this one:
https://www.reuters.com/markets/europe/german-government-makes-billions-debt-thanks-negative-rates-2021-12-22/
why would you rush to pay them back at all? Right? It's not the size of the debt you are in and the amount you own from others but how much that costs you each year. If the numbers are positive, why would you even bother?


https://www.pgpf.org/budget-basics/what-are-interest-costs-on-the-national-debt
The US pays now 2% of their GDP towards servicing debt, it was 3.2% in 1993, but at that time we didn't have widepsread internet and tiktok and wanna be an economist claiming that everything will end!

[ChuckBuck]

 just because a country has a large nominal debt figure doesn't mean it's drowning or unable to function economically. These countries, particularly the developed ones you've listed, possess substantial assets and financial instruments. Now, why don't they just pay off their debts if they're so wealthy? Think about it. If you could borrow money at a low-interest rate and then invest it somewhere with higher returns, wouldn't you? That's basically what nations do.

Also, here's a little nugget of truth: some countries strategically maintain debt because it's advantageous. Having debt instruments like bonds means foreign investors have a stake in your country's success. If they're invested, they're less likely to engage in actions that could harm your economy.

Now, your second point about rendering aids is something many people misconceive. Providing foreign aid isn't merely charity. It's often a strategic move, whether for gaining political allies or for ensuring resources and trade deals. 

[EarnOnVictor]

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.

My answer is not going to cover all country's indebts and certainly not all countries you added above but only for the truly developed and rich ones amongst them.

The loan is a very good saver for countries whether rich or poor and the conditions they get these loans are not burdensome which is a plus to them. By accepting loans, government fulfils obligations ahead of when the financial readiness would be feasible. This is a plus to them as they get to use the loan to fast-track their plans instead of having to wait more. And since they are rich, paying it back is not a burden. It's also worth noting that many of these loans are from somewhat cooperative arrangements as they are members of the system itself.

Secondly, are there any benefits, economic or otherwise of a country being in debt?

Yes, there is and I've stated some above. In addition, there are economic and political gains too as rich countries have large shares in the bodies that issue these loans. If there is no gain, there won't be a serious and rich country that would collect loans, they would rather wait.

[dothebeats]

I'm sure most of these listed countries are paying their debts but on an installment basis as they cannot do it in one go and it is pretty much unrealistic. If they do such a thing then there will be nothing left to allocate for the different departments that need their own budget to run properly and cater to the needs of the people. Moreover, it wouldn't be smart to just pay the debt in one go when they can do it in installments and only pay a good percentage while using the remaining budget to invest and make the money grow. As far as I am aware that is what most countries do, as here in my country the government does that as well.

[el kaka22]

They are, but also they are not. Debt is a way to grow, so when you make a debt, you grow and you pay it off in the future. Let me give you an example and you will understand, lets assume that you have a factory, this factory makes 1000 basketballs every single day, and the whole business worths 1 million dollars, and you sell each basketball for 1 dollars.

Let's assume that you take 1 million dollars more debt, and you need to pay make 1.3 million dollars in 10 years, meaning 130k dollars a year correct? So, you went from making 1000 balls a day, meaning 1k dollars per day, and 30k dollars a month, and 365k dollars a year right? With that new 1 million dollar loan, you buy as many equipment as you had, so now you make 2k balls a day, 2k dollars a day, 60k a month, 730k dollars a year. So you see, you have went up 365k more dollars a year, but only have to pay 130k dollars a year back to your loan. That is exactly what nations are doing.

[Razmirraz]

If measured by annual state income, these countries have no difficulty paying off debts. The government has several programs to improve the welfare of the people, such as a subsidy program for community needs and building infrastructure to make it easier for people in an area to run the economy. The government must take policies behind its responsibility in paying debts, State revenues must be managed wisely in order to maintain the prosperity of society.

Debts must be paid, but the government also cannot fight the problems of an economy that is collapsing due to recession. Large countries such as the United States, France, Italy and Portugal are not free from debt problems, so what about small countries whose annual income is very limited. They will continue to increase the burden on the state every year in order to build several infrastructures to support the community's economy.

[tjtonmoy]

There are several things that need to be addressed before using money that has been already planned to be used for other purposes. Such as the annual budget. There's a limited amount that gets passed by the government every year to help prevent inflation and price spikes of certain things. And that amount is not small. Also, they reserve some extra for emergency purposes. When they do that, they are left with so little that they can't fully repay the debts. Even if they have the ability to pay off all the debt at once, imagine this. It's not only about money, it's also about keeping a good relationship with each other.

It could be a forced relationship too. That way, those who lend that money will ask for different kinds of favors. They are already in debt so they are obliged somehow to agree. This is politics and not the economy. Well, this is what I think.

[Yatsan]

Answer is simple, they need their fund to run the economy. Just like with normal loans; the one who borrowed would make use of the money to other things perhaps in their business. Even if they happened to earn on their first month, they won’t do it ‘coz they would want to make that money bigger through revolving it for another month until it atleast double up and That would be the time they would pay only a portion of their debt, then do the cycle until whole amount is paid. Unfortunately there are times the one who is in debt has no plans of paying the amount he/she borrowed. With economies, agreement is prior before releasing the money and during the debt, negotiations could still be done and also, debt could be paid thru other ways possible which won’t cause any conflict to both parties.

[Spaceman1000$]

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

Normally it is often said that, he who goes borrowing goes sorrowing.
Most of this countries you see with huge debt burden,  even if they are among the first world countries. Upon borrowing the money, they find it hard to pay it at the stipulated time for repayment, so what they do is to service the loan interest pending when they will pay the capital they borrowed. What you see at the surface level as debt is just secondary, most of the lenders put stringent repayment system that the borrower will just end up servicing the loan interest. So for some countries this is their reality, so basically I feel it all depends on the agreement on the loan, that makes those suppose rich countries still have huge debt burden.

[coolcoinz]

But I don't understand why you say "no one pays their debt", everyone pays their debt right now except for some 3rd world countries, it's not like the US or any other country has a fixed debt and they are just adding money on top of that, the US is paying previous debts, Germany is paying previous debts and they are both taking new ones if the market is good enough for them.

They pay interest, but none of these countries are able to pay their debt in full, unless they'd do something crazy like dedicate most of their yearly budget to this.

In most cases the countries don't do it because it would be a suicide for the party that decides to do it. The voters don't want it to happen at the expense of other things like healthcare, wages and all that. If any government decided that they'll freeze wages, pensions, stop building new roads and houses, stop social benefits and so on, nobody would vote for them.

In other words, governments repay as little as possible because people want to see progress at any cost.

[Unbunplease]

Normally it is often said that, he who goes borrowing goes sorrowing.
Most of this countries you see with huge debt burden,  even if they are among the first world countries. Upon borrowing the money, they find it hard to pay it at the stipulated time for repayment, so what they do is to service the loan interest pending when they will pay the capital they borrowed. What you see at the surface level as debt is just secondary, most of the lenders put stringent repayment system that the borrower will just end up servicing the loan interest. So for some countries this is their reality, so basically I feel it all depends on the agreement on the loan, that makes those suppose rich countries still have huge debt burden.

Usually debtors are taken care of. Maybe that's why rich countries try to remain permanently indebted? In principle, repaying government debt is not such a big problem. But they are in no hurry to solve it. So, having an outstanding debt suits everyone.

[Hamphser]

But I don't understand why you say "no one pays their debt", everyone pays their debt right now except for some 3rd world countries, it's not like the US or any other country has a fixed debt and they are just adding money on top of that, the US is paying previous debts, Germany is paying previous debts and they are both taking new ones if the market is good enough for them.

They pay interest, but none of these countries are able to pay their debt in full, unless they'd do something crazy like dedicate most of their yearly budget to this.

In most cases the countries don't do it because it would be a suicide for the party that decides to do it. The voters don't want it to happen at the expense of other things like healthcare, wages and all that. If any government decided that they'll freeze wages, pensions, stop building new roads and houses, stop social benefits and so on, nobody would vote for them.

In other words, governments repay as little as possible because people want to see progress at any cost.

They would really be allocating on every sector on which they could really be able to see that they will really be able to have that money flowing continuously and this is why its true that they wont really be paying up

their debts fully but rather be paying up with the interest. There's so much things that needs to be done and its not really that necessary that they would really be tending to clear up those debts just to have that kind of record on having no debt which it is really unlikely for these countries government would really be doing so. We arent that so dumb not to know on whats the purpose of those loans which it would really be totally some expansion and further development into their economy on which building up more infrastructures which would really be having that creating more jobs or in overall it would be affecting out positively.

Government condition in speaking about economy then it would really be that totally depending on how well they do handle out those overall budget and allocation
and getting some loans or debts isnt bad as long it is really that been applied and for the benefit of the nation or country.

[teosanru]

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

First of all, you need to understand the concept of National Debt, This isn't the money that Japan/US has borrowed from some other country or some international community, infact just 5% of this might be external debt, most of it is the national debt, this has come from Fiscal deficits in the budgets each year, these keep on mounting because countries always keep a fiscal deficit to instigate economic growth. Most of this debt is the debt taken from Central Bank to print money, State Governments & public by issuing bonds, Countries keep on paying the old debts but in turn, keep on issuing new debts as well. Also as soon as the fiscal deficit is in control for these countries and obviously sovereignty is not under threat, high debt doesn't mean a bad thing.