this post was submitted on 05 Feb 2024
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Finance

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Why can't the government buy its own debts and cancel them? (beehaw.org)
submitted 9 months ago by TheBaldness@beehaw.org to c/finance@beehaw.org
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Or does the government already do this? If so, can anyone explain like I'm five?

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[–] jarfil@beehaw.org 8 points 9 months ago* (last edited 9 months ago)

Because being in debt is not bad... as long as:

  • You retain people's trust in you, so they don't ask for it back,
  • Or, you can get more new debt as you pay the old one,
  • And/or, you can force people to STFU about you being insolvent, "or else" (in the shape of an army, an orange face, or whatever).

Debt is only bad when someone asks you to pay all of it back at once, with interests. As long as they don't, then the more debt you get into, the more stuff you get basically for free.

Everyone likes free stuff.