| ▲ | insane_dreamer 14 hours ago | |
That's an important question, and why US Gov Debt is different than Japanese Gov Debt, which also has a higher debt-to-GDP ratio than the US (due to decades of "zombie economy"). About 90% of Japan's debt is held by Japanese themselves, so it's much more insulated from a crisis that can't be resolved through domestic economy policy. (It could in theory print its way out of it.) Whereas about 25% of US gov debt (which is 3x Japan's in nominal terms) is held by foreign governments, including very large amounts by China. This, combined with the US being the main currency used for international transactions, gives those countries leverage over the US economy (though selling off the treasuries would impact their own holdings as well), and conversely means that US monetary policy has a global effect. | ||