Why global debt may never fully be repaid.

[mirakal]

Because the global debt is no longer an option, but a priority to seek for economic growth. Let's talk US as an example. This country if I'm not mistaken has the biggest global debt, and has the largest economy globally, and could be one of the most progressive countries all over the universe. So they don't take the global debt as nothing but a tool to make their own economy surge high, regardless if that makes them having the biggest debt.

There is no big debt to a country where its economy is at its best function, and that people are given utmost benefits. And with an old debt, a new debt should be given consideration just to pay off the first debt, that's already the cycle.

[Stepstowealth]

The general assumption at face value when it comes to the repayment of debt is that, eventually countries pay up and are free from indebtedness. While this is true principle, it is quite different from what is in practice. Here's why;

It becomes a hard pattern to break when the first action of a country when they need money is to borrow, except there comes a government that is now interested in being indebted and looking inward to raise money instead. When countries borrow, they pay back in more than finance, these countries start to loose their sovereignty because any country that has consecutively lends money to another country can somehow start influencing some decisions in the country.

[rat03gopoh]

It's just my opinion that the global debt system is designed to be permanently unserviceable. I've observed that even countries with very low debt-to-GDP ratios, between 0.5% and 2%, simply let that level languish, even though I'm sure they can afford it. Debt doesn't just indicate a need for funding; it can also indicate a larger strategy, such as a cooperative relationship between countries.

[Razmirraz]

The general assumption at face value when it comes to the repayment of debt is that, eventually countries pay up and are free from indebtedness. While this is true principle, it is quite different from what is in practice. Here's why;

In reality, the facts on the ground are different. When the debt matures, the country never pays off the principal debt, instead the government borrows new debt to pay off the old debt. This is why debt will realistically never be paid off because the modern financial system is designed as a perpetual debt maintenance mechanism. Some countries believe that even a large country like the United States cannot escape debt because the concept is considered to be able to maintain continuity or keep the wheels of the economy running without having to resort to extreme budget tightening.
So the main priority is not repayment, but rather management and maintaining creditor trust. Debt is considered to function as a liquidity instrument that funds the country's growth and operations, not as a short-term loan that must be repaid until it reaches zero.

What this means is that, inflation is may become politically preferred to austerity, changing the long term meaning of currency preservation.

Inflation is used as a political tool to reduce the real burden of debt over time. This is the reason why governments often allow inflation to occur because inflation inherently reduces the real value of a country's debt over time, making it a hidden tax that is preferred by policymakers in a country.
In fact, what makes the people suffer is the state itself because the governance and economic policies implemented do not favor the welfare of the people.

[Mr.leeemzy]

The general assumption at face value when it comes to the repayment of debt is that, eventually countries pay up and are free from indebtedness. While this is true principle, it is quite different from what is in practice. Here's why;

At sovereign levels, many economies are surviving by; refinancing debt and rolling debt forward,bin some cases countries even surrender a chunk of their natural resources for a couple of years to be able to qualify for more indebtedness.

With critical analysis we're seeing that the modern financial system is functioning more like a perpetual debt maintenance than a normal repayment structure.

What this means is that, inflation is may become politically preferred to austerity, changing the long term meaning of currency preservation.

Personal I don't believe in all these government borrowing money or complaining the country is in debt because you will hear them saying they borrowed alot of money from someone, organisation or even country but will never hear them saying they have paid the debt so I feel maybe they are just using lending money or in debt to cover their sheedy deeds for instance in my country we usually hear our government saying the country is in debt or they borrowed money from somewhere but we never hear them say they've paid back the loan and will hear again that they still went to borrow from same people again are they fools that will keep borrowing without benefits or payback from same people. it is just a tactics to lure the citizens minds elsewhere why they do what they want...

[Mhizlove]

Global debt first of all can never be repaid. I just think all we are doing is one big Ponzi scheme. Never ending. Always running. Printing more money to finance a debt that keeps growing and the circle continues.

Most of these countries that borrow money from IMF will never grow economically. It's by design. One big debt trap.

Let's put this into perspective. If the world owes money. Who then are we paying it to? That alone will tell you no debt will ever be paid. It will just keep on climbing until the entire system collapses.

I will say that debt on its own is not always a bad thing. The real problem here is whether the money that is being borrowed is used for something productive that can grow the economy or it's just for covering old problems without creating new values and also it's not a must that countries should pay all their debt at once,most times the focus is on managing the debt responsibly. You see danger starts when borrowing grows much quicker than the economy's capacity to handle or manage it, because that's when financial burdens or pressure begins to increase.

[Hewlet]

At sovereign levels, many economies are surviving by; refinancing debt and rolling debt forward,bin some cases countries even surrender a chunk of their natural resources for a couple of years to be able to qualify for more indebtedness.

In some unfortunate cases, we see countries becoming indebted without a single plan of repaying it back and some taking up loans for consumption purposes which ends up frustrating any administrating that comes up after them. from the structure of global debt, most of them does not look like one that is taken with the hope of repayment. an administration comes, take up a loan to fund their tenure and leaves things all messed up for the next administration that comes again to take up another loan use it to sort out the mess of the previous administration and causes his own mess leaving the next one to fix. with this strategy, the loan can only continue pilling up.

[Jostern]

Most countries have been very inappropriate with their loans knowing they’re not going to pay or sustain any of the loans that they are owing the, we can still understand that most of this countries takes this loans for no particular reasons, because the opportunity is there for them to take this loans, but I don’t really know why countries like Nigeria takes all this loans while they’re doing nothing with this money, and I don’t believe that this loans that are taken are paid back, because I don’t really see how they will be able to payback’ this loan is something that is unimaginable.

[Aanuoluwatofunmi]

I don't think there is a country that has no debts on them, the only difference is that the rate at which each one is indebted are different from each other, also talking about the economy development of a country and how the leadership are being able to manage it in a proper way that encourage for more productivity of GDP, employment rates and other statistical measures that are needed to know what they are achieving at a particular time and what they needed to improve more on on their target.

[Pablo-wood]

It's just my opinion that the global debt system is designed to be permanently unserviceable. I've observed that even countries with very low debt-to-GDP ratios, between 0.5% and 2%, simply let that level languish, even though I'm sure they can afford it. Debt doesn't just indicate a need for funding; it can also indicate a larger strategy, such as a cooperative relationship between countries.

Do we call it cooperative relationship or modern day slavery. Some debt are taken not because of necessity some are just delebrate act to keep bilateral relationships going. It's unfortunate citizens face the repercussion. Some time I feel the world just need to have revolution as often as possible to help keep things under check.

Countries who once had low debt,-to-GDP ratio and suddenly climbs the ladder of high debts are only funding systems that will keep their subjects under strict surveillance just to ensure easy manipulation of economic systems and power control.

[Smartprofit]

A financial system based on credit, in itself, is not flawed, in my opinion... 🙋

When a farmer plants a grain, he is confident that the next harvest will yield ten grains instead of one. When a fisherman goes out to sea in a boat, he is confident he will catch a whole boatload of fish. From a business perspective, it makes sense for both the farmer and the fisherman to borrow money to buy grain for planting or a fishing boat. Both the fisherman and the farmer understand the time value of money. If there is no boat today, there will be no fish tomorrow. And if a boat is bought only tomorrow, the fish will only be caught the day after.

Problems, in my opinion, begin when the population of countries begins to decline (as is currently happening). If the population in a country is not growing exponentially, then repaying debts is fundamentally impossible. Especially if the country values ​​financial speculation rather than production.🤷

[Cheema02]

Most countries have been very inappropriate with their loans knowing they’re not going to pay or sustain any of the loans that they are owing the, we can still understand that most of this countries takes this loans for no particular reasons, because the opportunity is there for them to take this loans, but I don’t really know why countries like Nigeria takes all this loans while they’re doing nothing with this money, and I don’t believe that this loans that are taken are paid back, because I don’t really see how they will be able to payback’ this loan is something that is unimaginable.

If a country takes some loans from international organizations or some other resources than its not a bad decision. Many countries take loans to bulid there power plants, schools, hospitals, and roads and these projects directly or indirectly involves in financial growth of the country. But the actual point to raise is that is this loan used wisely or is these projects can repay the debt. Lets instance in case of Nigeria people are not satisfied with the projects that run with the amount of loan so these type of mishandling creates doubts in the mind of people about transparency and and the polices of government's. However many countries repay the loan by taxes and through economic growth. So the learning point is that taking loans for the improvement of countries os not bad but after taking loan don't repay it with time is very unethical.

[EluguHcman]

I just think all we are doing is one big Ponzi scheme. Never ending. Always running. Printing more money to finance a debt that keeps growing and the circle continues.

Most of these countries that borrow money from IMF will never grow economically. It's by design. One big debt trap.

Let's put this into perspective. If the world owes money. Who then are we paying it to? That alone will tell you no debt will ever be paid. It will just keep on climbing until the entire system collapses.

It is funny how you sighted a Ponzi practices in this global indebt economy system but of the truth, with this kind of indefinite indebt economy that an entire global nations can not be able to pay off despites the financial revenues of the nation is really equal to the task of being considered as Ponzi scheme.

Moreover the fiats has unlimited supplies and the central banks are always printing more cashes so why not print as much to pay off debts or even print as much to sustain the needs of the national budgets and don't have to borrow?
There is no point of digging this too far, the entire global economy systems is just being politicised and only those nations with global influences that are likely to stand their ground. No surprise with the US global influence despites their huge debts.

Come to think of it, if this scheme is not Ponzi, who is the globe owing and why can't the debts settle for the sovereignty nations to be debt free?

[STT]

All the debt will be repaid in the nominal sense just the value will be diminished so that it is a loss in the total accounting.  That much is already known and expected, and nobody wants to realize that reality and state it because it would damage their political career and government commands all others who would speak to not break the silence on this truth.
  Its an expected reality because its happened so often in the past its actual normal, all currencies tied to purely paper have always gone broke right from the very first paper which was the Chinese empire system I believe hence why China values gold traditionally and even the communists now for 25 years highly rate and produce gold as much as they can.

[tygeade]

I will say that debt on its own is not always a bad thing. The real problem here is whether the money that is being borrowed is used for something productive that can grow the economy or it's just for covering old problems without creating new values and also it's not a must that countries should pay all their debt at once,most times the focus is on managing the debt responsibly. You see danger starts when borrowing grows much quicker than the economy's capacity to handle or manage it, because that's when financial burdens or pressure begins to increase.

This is the problem, most of the new debt, goes over to pay for inflation and old debt interest. Interest is the real problem, when you have 30 trillion debt or more, like USA, you pay trillions in interest, and that means you are literally not growing and charging people tax for old debt, and not even paying it yet, you are only paying the interest, you need even more to just pay to make the debt smaller.

This is why it never gets smaller, it always gets bigger, and will not stop growing anyhow. Today it is that much, tomorrow it will be 50 trillion, and in the future it will be 100 trillion. The only hope they have is to see it happen slowly like the past 10 years so that they can have low inflation. Probably another innovation beyond AI, may bring more earning and capability to repay in a way at least interest would not be growing.

[X-ray]

It's just my opinion that the global debt system is designed to be permanently unserviceable. I've observed that even countries with very low debt-to-GDP ratios, between 0.5% and 2%, simply let that level languish, even though I'm sure they can afford it. Debt doesn't just indicate a need for funding; it can also indicate a larger strategy, such as a cooperative relationship between countries.

Some country maintain debt to GDP ratio to be higher even when they don't even need the debt in the first place to secure future access to credit market.

Kind of building credit score but for country.

Debt has become a strategy for some country and it's a lot more complex than country borrowing money from another country indeed.

Government also issue bond for the sake of stimulating domestic economies.

[alastantiger]

What this means is that, inflation is may become politically preferred to austerity, changing the long term meaning of currency preservation.

I agree to all that you have said, global debt will never be repaid because there is no scenario in which all the debts in the world gets repaid, if that happens then other top countries will have no leverage over the poor countries.

Debt has been a way world power countries use to hold other nations under their control so that they can control things like their natural resources and other things that lead to development, natural resources is the most common resources used to maintain debt and many countries have been surviving on this hence it will be unreasonable to try to clear all your debt with the money that is meant to maintain the economy in the present time but that does not mean if anyone reading this finds their self in power one day that they should not look for a way to reduce the debt of their country as this gives the country more power in the world.

[imthegreat]

The general assumption at face value when it comes to the repayment of debt is that, eventually countries pay up and are free from indebtedness. While this is true principle, it is quite different from what is in practice. Here's why;

At sovereign levels, many economies are surviving by; refinancing debt and rolling debt forward,bin some cases countries even surrender a chunk of their natural resources for a couple of years to be able to qualify for more indebtedness.

With critical analysis we're seeing that the modern financial system is functioning more like a perpetual debt maintenance than a normal repayment structure.

What this means is that, inflation is may become politically preferred to austerity, changing the long term meaning of currency preservation.

Yes, the global financial system is at least strange. First, if one country can no longer pay its obligations, it defaults and everyone forgives its debts. At the same time, many countries, if they cannot pay their debts, then they ask for a new debt simply with high interest rates. And it's all about infinity. If I'm not mistaken, the United States has such a situation, and this explains why they are so worried about petrodollars. At the same time, the dollar is not backed by gold, it is periodically reprinted. It all looks like a bacchanal.