Economics Stack Exchange
Economics Stack Exchange

Questions tagged [government-debt]

223 questions
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Why do people buy negative interest rate bonds?

I get that people buy long term government bonds, because of how safe it is, and if there would be a recession the government would just print more money and could pay it back. But why would anyone buy a bond, that yields a negative return? If i…
curiousTrader
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Who exactly foots the bill if Greece defaults

Apologies if the topic is not appropriate (economics newbie here) but I am curious as to who exactly would foot the bill if Greece defaults on the ~300 billion dollars it owes. It looks like most of the money is owed to EU, IMF and ECB but what does…
stali
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If I don't pay a debt, then the creditor takes my goods. Why, then, do Greek creditors not take Greece?

Normally, when you don't pay a debt, your creditors take your goods (house, car, etc). If Greece cannot pay its debt, can its creditors take Greek goods (structures, cities, industries, lands, etc)? Can Germany, or other organizations, become owners…
Alberto Fontana
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Why does China buy so much U.S. Treasury debt?

What is the reason that China buys so much US debt in form of Treasuries? How does this help the Chinese economy? It seems they are willing to give money to USA so USA economy can function better (more cash more investing in infrastructure). What is…
Victor123
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Is there a “runaway” threshold for Debt-to-GDP Ratio in the U.S.?

Last year, when Congress was debating the stimulus/relief packages, one Senator made a comment about the debt-to-GDP ratio and how we are approaching a point in that ratio that will have some major negative effects. What are these supposed effects?…
Jacob Jones
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Why does any treasury / central bank hold gold?

I know the US treasury is slowly selling its gold reserves, but what is the actual mission and purpose when it comes to the holdings? What is the reasoning behind the slow rate of liquidation? I have even heard "tradition" and "propping up…
Vasiliy Sharapov
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Are there any states that don't have debt?

I've not been able to find any states that don't have debt to other states. This, to me at least, seems really strange. Are there any nation states that are not in debt to other states, if so which ones, and if not why can't everyone just settle…
Zell Faze
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Is it possible to eliminate the U.S. national debt?

A political science teacher of mine has said that the U.S. national debt has grown way beyond reach and is now just a political talking point with no real value. He says that there is no point in trying to pay it back and that it should be left…
Howsikan
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Why can't a government print money to pay its debt?

I have written an explanation to one of the famous questions "why can't government print money to pay its debt". Is my explanation correct? Is this the similar situation which happens in real life? Is there really a foreign exchange bank? Do…
krazykode101
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Why do indebted governments fear deflation?

It's widely accepted among people who follow finance that various governments around the world, including the US government, are doing (or their central banks are doing) everything possible to keep their economy out of a deflationary state. (cf. Ben…
Mason Wheeler
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Why are nations engaging in austerity when bond yields are historically low?

In the UK and EU austerity programmes are rife. However, bond yields are also historically low, and have even been negative! At a time when debt is cheaper than ever, and below the accepted long term rate of inflation, why do governments not take…
James
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Why would China and Russia selling the US' debt ruin the economy?

I was listening to an interview with David Harvey and he mentioned that if Russia and China were to sell the debt owed to them by the US, the US economy would take a serious dive. How would they sell the debt and why would that impact the US economy…
paste
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How did Portugal draw down their interest rates on pubic debt?

I notice that Portugal had a very high interest rate on its national bond issues back in 2012 but since then it has drawn down significantly: How were they able to decrease the interest rate?
Lassie Fair
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Government bonds and printing money

Wikipedia: If a central bank purchases a government security, such as a bond or treasury bill, it increases the money supply, in effect creating money. My question is: what is the difference between this (government issues bonds and the central bank…
Joe Jobs
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Do governments have to pay interest on government debt held by the central bank?

Through open market operations, the central bank may buy government debt to increase the money supply. Does the government need to pay interest on the debt held by the central bank, or does the debt become interest-free?
Flux
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