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

[red4slash]

I also see it this way, surely a country's budget has been planned long ago and surely they will prioritize it more than paying off their debts first. One of the country's income is from taxes paid by each citizen and maybe they have other considerations. I think it's understandable why that happens, because I'm trying to make a problem on a personal scale. For example, I'm in debt, my income is not enough to pay the debt in full every month, and the option is to pay it in installments. It's possible that I could pay off my debt in a month, but of course I can't do anything including basic needs that might not be met.

I understand this in such a way that each country has a budget that they form for a certain period, and accordingly they see how much money they need for normal functioning and development. Obviously, this does not allow them to pay off the entire debt in full, since they will not have funds left for normal functioning, so they pay off this debt in parts. For some countries this debt is decreasing, for some it will increase if their budget is not enough, it depends on many factors, and everything is much more complicated.

Because in the end running a country can also be said to be the same as running a business so they cannot drain your cash to pay off debts at once because in the end this will make several projects that are already running will be abandoned and this could actually be a potential for us to add new debts.

Everything has its own plan and the government that does the planning knows what steps they will take.
For example, in this case the largest debt at the moment is Japan with a total debt of $10.1 trillion (as op said in the thread) if Japan pays off directly it is certain that their financial condition is destroyed at that time but if they do it periodically as is currently happening, of course the results are different and the proof is that Japan is currently one of the most advanced economies in the world.

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[erep]

Everything has its own plan and the government that does the planning knows what steps they will take.
For example, in this case the largest debt at the moment is Japan with a total debt of $10.1 trillion (as op said in the thread) if Japan pays off directly it is certain that their financial condition is destroyed at that time but if they do it periodically as is currently happening, of course the results are different and the proof is that Japan is currently one of the most advanced economies in the world.

Every country on the list of the largest debts in the world will not be able to pay it off with one payment but they will pay periodically on the condition that they will not add to other debts. I am surprised that Japan is in first position on the list of the largest debts in the world even though it is said to be the country with the most advanced economy in the world.

However, apart from the countries on the list above, there are several other countries that have high amounts of debt, but the government has the worst history because the government wants to improve the country's economy from debt sources for development needs and some of it is used for community assistance so that they do not stage demonstrations against the government, many corruption cases from the main source of debt funds from other countries but they are very arrogant and anti-criticism so that many corruption cases are not tried or many corrupt convicts are free to leave prison.

[Ryu_Ar1]

I am not an expert in economics but when I look at the performance of a government I think they must also be aware that when they pay off the debt they have immediately it will disrupt the financial system they have because after all stability is important and rather than doing something risky by immediately paying off large debts they must have a basic budget that is used as a benchmark and they have other priorities such as in infrastructure or other things that they think so surely they will prioritise the agenda they set up rather than immediately paying off large debts in cash.

I also see it this way, surely a country's budget has been planned long ago and surely they will prioritize it more than paying off their debts first. One of the country's income is from taxes paid by each citizen and maybe they have other considerations. I think it's understandable why that happens, because I'm trying to make a problem on a personal scale. For example, I'm in debt, my income is not enough to pay the debt in full every month, and the option is to pay it in installments. It's possible that I could pay off my debt in a month, but of course I can't do anything including basic needs that might not be met.

Facilities such as health, education and some infrastructure improvements sometimes depend on taxes paid by the public so in this case, when looking at the debt for each country, it is actually not too scary if in the end the country knows what to use the money borrowed and they (the government) know that by borrowing apart from having relationships from ties they are also aware that this can help them improve conditions in their country without worrying about finances even though they have to pay the installments but it doesn't matter because by borrowing money before they get some projects whose progress can be very good for them in the future.

As long as the government knows what the debt is for and some of the planned projects go well, it is not too wrong to go into debt and there is when the instalment option why do we force to pay the whole amount because it can actually interfere with their electability in the economy.

[dothebeats]

I am not an expert in economics but when I look at the performance of a government I think they must also be aware that when they pay off the debt they have immediately it will disrupt the financial system they have because after all stability is important and rather than doing something risky by immediately paying off large debts they must have a basic budget that is used as a benchmark and they have other priorities such as in infrastructure or other things that they think so surely they will prioritise the agenda they set up rather than immediately paying off large debts in cash.

I also see it this way, surely a country's budget has been planned long ago and surely they will prioritize it more than paying off their debts first. One of the country's income is from taxes paid by each citizen and maybe they have other considerations. I think it's understandable why that happens, because I'm trying to make a problem on a personal scale. For example, I'm in debt, my income is not enough to pay the debt in full every month, and the option is to pay it in installments. It's possible that I could pay off my debt in a month, but of course I can't do anything including basic needs that might not be met.

Facilities such as health, education and some infrastructure improvements sometimes depend on taxes paid by the public so in this case, when looking at the debt for each country, it is actually not too scary if in the end the country knows what to use the money borrowed and they (the government) know that by borrowing apart from having relationships from ties they are also aware that this can help them improve conditions in their country without worrying about finances even though they have to pay the installments but it doesn't matter because by borrowing money before they get some projects whose progress can be very good for them in the future.

As long as the government knows what the debt is for and some of the planned projects go well, it is not too wrong to go into debt and there is when the instalment option why do we force to pay the whole amount because it can actually interfere with their electability in the economy.

Exactly, that is how this is. The government borrows money from another country for a project they know will do good for the country and will surely help with the economy and then settle the payment through installment so it wouldn't be as big of a loss as it is compared to fully paying it. Moreover, there are also having ties with more powerful and established countries that bring good relationships. However, we cannot of course turn our backs from some instances wherein the debt of a country keeps pilling up and no projects are being made and seen by the public, in such instances we cannot blame the rise of concern and questions thrown by the people to their government as it can truly be questionable as to where the money is going.

[so98nn]

Those are crazy debts. However one thing I know, the income which is GDP for every country is definitely progressive as compared their debts. But I see it similar to individual case. Let’s say I’m having House loan and I have X salary. The thing is though my salary is progressional every year I would not put lum sum amount in my loan account to clear it quickly. If I do that then I will miss many opportunities such as investing my money, maintaining my house, bringing new things in my house to make it better, personal care stuff and much more. I would need money to develop those things.

In similar way country needs to look after thousands of ongoing affairs. I’m sure they would also not clear it just like that if they got tenure for it.

[bittraffic]

Those are crazy debts. However one thing I know, the income which is GDP for every country is definitely progressive as compared their debts. But I see it similar to individual case. Let’s say I’m having House loan and I have X salary. The thing is though my salary is progressional every year I would not put lum sum amount in my loan account to clear it quickly. If I do that then I will miss many opportunities such as investing my money, maintaining my house, bringing new things in my house to make it better, personal care stuff and much more. I would need money to develop those things.

In similar way country needs to look after thousands of ongoing affairs. I’m sure they would also not clear it just like that if they got tenure for it.

Easy to analyze it that way when no one is interfering with your policy. Those countries have some responsibilities and there are geopolitical blocs that will interfere when a country invests their money somewhere and not on their own. The majority of the countries around the world are already dumping US treasury bonds and Dollar reserves including those that are listed by OP so damn sure they won't pay.

For bigger and more powerful countries, it's more convenient to just make war and occupy other countries that can't fight back and exploit their resources. 

[MarjorieZimmermanGinger]

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?

Debt is caused by many things and this is done because there is no choice that a country can take or it could be that it is pursuing a infrastructure development and others but along the way it experiences obstacles because it is unable to pay. There are several countries that are currently experiencing bankruptcy because they owe too much to other countries and debt problems are becoming a big problem for several countries at the moment, especially if the country does not have a steady source of income from various existing sectors. Countries that do not have income from natural resources, industry or other sectors will actually have difficulty borrowing money from other countries because they cannot afford to pay high interest rates.

If the question is why countries are capable of paying off debts but don't do it, perhaps it is because the form of government is corrupt and creates a much worse system for the country. A good government will make efforts to settle debts with other countries and if they are able to pay it is unlikely they will not do so.

[philipma1957]

It is the old concept of economic used by the citizen in their  country to scam their government to pay their tax.Let me explain with the citizen model,then you can understand in the way of the government.The citizen will start the company and get the salary from their company and ask their clients to pay their owing in terms of buying their stocks in the stock market.So their won’t be high economic flow in their company,it reduce half of the tax to the company owners.The second way is the company owners will buy all their luxuries thing by loan using their stocks into the bank with low interest.By this they no need to pay tax for the luxury properties.Like this Developed countries get loan by their government bond.

Very accurate. The USA was fine with budgets until Nixon changed gold standards and lowered taxes on the rich.

The move to subsidize the rich was expanded by Reagan.

Now a rich american enjoys a very low tax rate in comparison to many other countries.

USA will soon do a major move as 22 straight off balance years will need to end . I can’t see me writing that the off balance will be at 30 years in a row.

[Casdinyard]

The thing about debt is that it's not as easy as just taking it up or paying it off. There's a lot at play when it comes to these things. For instance, paying it off isn't as easy as just sending them money via bank transfer or whatnot, and most often due to the nature of money the ones who were paying it off will always going to be at a disadvantage, which may lead them into taking up another loan anyway, so instead of actually just paying the loan off and then taking up another loan in the process what they do instead is just rack it up with a collateral in exchange should they default, and when things go sour they can take what's set as the collateral and go from there. It's a pretty convoluted process and there's a lot of stuff that goes on with paying loans when you're a large scale entity like a country.

[mvdheuvel1983]

Debt is not a bad thing, poor countries are still poor even without debts. Debt is what the world is built on. And these dents can never be repaid. What these countries do is that they keep paying off their interests on these debts while leaving the debt.

-https://www.globalissues.org/article/31/the-heavily-in-debt-poor-countries-initiative-is-not-working

[DrBeer]

True that but there is no need for that because the contract of debt is not a one-time payment but rather it can be paid in installments.  This is the reason why the debt of a country last of decades.  Since the interest is minimal, a country can take advantage of it and pay the debt without greatly affecting its annual national budget. 

It is true, if the US decided to print more dollars, the value of their currency will deflate due to inflation and their economy will suffer.

The U.S. has one undeniable advantage. It is the power of the economy, politics and the dollar. And the latter will feel fine even if the U.S. starts printing money. Although ... let's add wisdom to the mix. They will not start printing money, thoughtlessly and for some miserable purpose - to pay off their domestic debt )

I will ask the simplest question: below is the list of 30 countries with the LOWEST domestic debt. you have a choice - you can go to live / develop business in any of these "successful countries" or in the USA "with a wild domestic debt". And so - your choice :
USA or
Brunei
Macau
Palau
Haiti
Uganda
Malawi
Eritrea
Nigeria
Afghanistan   
Algeria
DPRK
Myanmar
Ethiopia
Burkina Faso   
Benin   
Equatorial Guinea
Cameroon
Fiji   
Nepal   
Democratic Republic of the Congo   
Burundi   
Chad   
Niger
Bangladesh   
Iran   
Niue   
Mozambique   
Senegal   
Lesotho
Mali   

 

[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?

There can actually be plenty of value in not paying off your debts in many situations. Debt for the individual consumer can be bad except for when you're paying off a mortgage. However if you use that "good debt" mortgage as an example, it can actually provide a lot of leverage to the homeowner - if they've got an interest rate on their mortgage of 5% but the value of their house is raising by 7% per year due to demand, then in theory they are benefiting by paying down the asset but also having the underlying value increase above their loan cost. If you imagine that on the scale of countries, if China were to buy a lot of US debt but the US printed a lot more money, then essentially they can deflate their debts away as they have ultimate control of the money printing side.

[Godday]

Exactly, that is how this is. The government borrows money from another country for a project they know will do good for the country and will surely help with the economy and then settle the payment through installment so it wouldn't be as big of a loss as it is compared to fully paying it. Moreover, there are also having ties with more powerful and established countries that bring good relationships. However, we cannot of course turn our backs from some instances wherein the debt of a country keeps pilling up and no projects are being made and seen by the public, in such instances we cannot blame the rise of concern and questions thrown by the people to their government as it can truly be questionable as to where the money is going.

I used to think that a country owes money to finance important infrastructure which will later become a country's basic needs which will bring progress and economic growth. However, the problem is that most countries that are in debt only generate debt interest that must be paid every year. I mean, as a citizen of a developing country, I see that most debt ends up being wasted with much of it being spent to finance the needs of government employees. I can't say about the ten countries that OP mentioned, but when discussing a country's debt, I think that in the end the greed of politicians will result in a country that continues to be in debt and continues to be in debt.

9. Brazil

Did OP forget to provide data on Brazil's national debt burden?

[philipma1957]

Everything has its own plan and the government that does the planning knows what steps they will take.
For example, in this case the largest debt at the moment is Japan with a total debt of $10.1 trillion (as op said in the thread) if Japan pays off directly it is certain that their financial condition is destroyed at that time but if they do it periodically as is currently happening, of course the results are different and the proof is that Japan is currently one of the most advanced economies in the world.

Every country on the list of the largest debts in the world will not be able to pay it off with one payment but they will pay periodically on the condition that they will not add to other debts. I am surprised that Japan is in first position on the list of the largest debts in the world even though it is said to be the country with the most advanced economy in the world.

However, apart from the countries on the list above, there are several other countries that have high amounts of debt, but the government has the worst history because the government wants to improve the country's economy from debt sources for development needs and some of it is used for community assistance so that they do not stage demonstrations against the government, many corruption cases from the main source of debt funds from other countries but they are very arrogant and anti-criticism so that many corruption cases are not tried or many corrupt convicts are free to leave prison.

The list is in the wrong order.


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


correct is

1) United States $36.8 trillion
2) China             $13.75 Trillion
3)Japan             $10.1 trillion
4) France           $  3.478 trillion
5) Italy              $  2.94 trillion
6) England/ U.K. 6) Canada          $  2.52 Trillion
7) Spain             $ 1.74 Trillion
8 ) Brazil            $ 833.6 Billion
9) Belgium         $  640.3 Billion
10 ) Greece          $  415.35 Billion
11)  Portugal        $   305.45 Billion


Not sure how to count U.K. debt or Great Britain Or common wealth as I get about six countries mentioned.

So take my correction with a grain of salt.

I think Canada is separate from G.B

the number I get for G.B. is  2.62 trillion

the number I get for Canada is 1.134 CAD not USD

I did bing and google searches .

I am sure there are multiple numbers.

But the high debt countries all have a lot of really rich people that under pay tax. Making both the middle class and the poor shoulder the debt.

[jasonjm]

Many reasons could be influencing the country to not pay off its debt. When a country announces its budget, the majority portion of the budget is allocated to domestic needs. For example, infrastructure development, education, research, health, transportation, industry, etc. And very limited resources are allocated to debt repayment (to avoid default). If they want to pay off their debts, they have to allocate a huge chunk of their development budget, which means cutting funds from important areas.
Every loan agreement has some fixed due amount that a country has to pay after a year, so they are actually paying their debt but in a small amount. That is how capitalism works.

[slapper]

Not all debt is bad debt. Surprising, huh? Debt is frequently used by nations as a means of funding construction, upkeep, and other forms of development. Even if they have the resources to make the payments, that doesn't mean they're in over their heads if they choose not to

Giving aid while also being in debt is a standard diplomatic practice. Countries give help to boost diplomatic ties, the recipient country's economy and government, and the donor nation's international standing. So, certainly, even countries with massive debts can and do offer help, putting international development priorities ahead of domestic budgets

[Learn Bitcoin]

Because they are in developing mode at this moment and they are paying in installments. At the same time, they are taking more loans as well. They can pay their debts at once if they want. But that will have a big impact on their economy, like the stock market. If you sell big numbers of your shares, and if it's a significant amount, it will affect the market.

Those countries are doing development with these loans, and they are expecting a good return from their investment. No one is forcing them to pay all their debts at this moment. This is the reason why they are not paying their debts.

[red4slash]

snip -
correct is

1) United States $36.8 trillion
2) China             $13.75 Trillion
3)Japan             $10.1 trillion
4) France           $  3.478 trillion
5) Italy              $  2.94 trillion
6) England/ U.K. 6) Canada          $  2.52 Trillion
7) Spain             $ 1.74 Trillion
8 ) Brazil            $ 833.6 Billion
9) Belgium         $  640.3 Billion
10 ) Greece          $  415.35 Billion
11)  Portugal        $   305.45 Billion

Hey mate, I really didn't notice that and like you said I was fooled by the list because of the random order.
But in this case we can draw a conclusion in this case where when big countries that have debts that are crazy to imagine they are the most advanced countries in the economy and this proves that they run their countries very well because they know when they want to be a very advanced country then they also need to take all the resources to be used as strength and they also realise that debt is not that scary if they know how to manage money properly.

But the high debt countries all have a lot of really rich people that under pay tax. Making both the middle class and the poor shoulder the debt.

IMO it depends on where you live because indeed when talking about taxes it depends on the country's own policies and also depends on the human being because even though he is a rich person but if he is obedient and disciplined he will definitely pay taxes correctly but indeed your words cannot be denied because the problem of rich people avoiding taxes always happens.

[zaim7413]

The government has to bear so many burdens that it has to prioritize other social needs rather than paying off all the debts that are a burden on the state. The government has large expenditures every year to pay the salaries of all civil servants from various departments. Apart from that, the government also needs to allocate a number of funds for the prosperity of society by building several public facilities.

The poor, homeless and unemployed are also a burden on the state. In a series of other needs that must be resolved, the government also cannot ignore their presence. Assistance such as decent housing, opening employment opportunities and health facilities need to be sought to maintain their survival. The state debt will continue to be paid every year depending on the size of the state's income, but the government cannot prevent borrowing when the state's financial stock is getting smaller.

[_BlackStar]

Debt is not a bad thing, poor countries are still poor even without debts.

I'm not an economist – but I don't completely agree with your assumption that poor countries would remain poor without debt. Abundant natural products can increase a country's income, as can its natural resources. Do you remember Qatar - yes, they are a good example to break your assumption that poor countries will remain poor without debt.

I believe Qatar may have had debts before they became a rich country due to natural gas and oil – but the natural resources they have have changed the country's economic status at the world. Of course, natural resources are a factor that will change the fate of a poor country ^{[have debt or have no debt].}