How does a nation go bankrupt ?
Ranger asked:
I’ve heard several candidates claim that by spending too much we go bankrupt? how is a nation with our economic status exactly go bankrupt ?
I’ve heard several candidates claim that by spending too much we go bankrupt? how is a nation with our economic status exactly go bankrupt ?
I’ve never taken an economics course so this idea of a nation going bankrupt is very confusing to me.
Yeah but don’t we always spend more than we have, and just have the fed print the rest of the cash needed or borrow it from another nation ?
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Category: Economics | Tags: Economic Status, Economics Course, Going Bankrupt 11 comments »
June 30th, 2009 at 3:54 pm
Get into a war they can’t afford
July 2nd, 2009 at 1:09 pm
by electing Texas republicans for president.
July 5th, 2009 at 10:01 pm
Ask Bush!!!! he’s the pro…
sw
July 9th, 2009 at 8:33 am
when we are 10 trillions in debt and counting…
July 11th, 2009 at 6:58 pm
I suppose the same way a person does
Willie Nelson should not have gone bankrupt (maybe he is a bad example but he was rich ) but he did
There have been other examples of very wealthy people with huge incomes and even bigger out go’s – that equation seems to work no matter what
It is therefore the ratio of spending to income as opposed to the numbers themselves
10 dollars in 11 owed = bankrupt as much as
50 Trillion in and 51 Trillion owed
July 12th, 2009 at 4:29 am
Let Bush take over and just sit back and watch!
July 14th, 2009 at 5:32 am
A country at the end of its resources, exhausted,stripped bear, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors is defined as bankrupt .
Interesting?
July 15th, 2009 at 7:02 pm
just watch our country, USA. we are the perfect example of a country going down the tubes, into bankrupt USA.
July 17th, 2009 at 11:26 pm
A country can’t really go bankrupt, but it can get to the point to have such poor credit that it has a hard time borrowing.
If you want to see a current example read a little about Zimbabwe. Once a relatively prosperous african nation, now has inflation so high it can not be calculated (over 8000%), food shortages, despite once being an exporter of food. Sad, but that is what happens to a nation in bankruptcy.
And the US is not even close to that, but that is no excuse to get worse rather than better, eh?
July 19th, 2009 at 11:35 am
A nation that prints its own money can’t go bankrupt. The national debt could essentially be eliminated overnight by simply increasing the supply of dollars and paying of debts. However, that increased supply of money (without a corresponding increase in production) would lead to rapid inflation that would essentially devalue the property of Americans to the point of poverty.
July 19th, 2009 at 2:47 pm
It’s a tough question…
I guess you’re speaking about developed economies in general.
It is hard to define it exactly, but one can say a country goes bankrupt when it can’t repay it’s debts anymore.
Nobody can take away everything one country has, but this event would have severe impact on countrys economy.
How? Borrow more than you can repay- US mortgage crisis perfect example.
Run enormous deficit each year- US is perfect example.
Sell your debt to China, Japan, rich Euro countries- US is perfect example. They buy more and more debt, because they have savings, while in US, savings are history.
There are tables with national savings, per country, you can see US citizens have very little savings…in well-run economies, citizens have savings.