Post
Topic
Board Economics
Re: America's new debt ceiling - $19,600,000,000,000
by
uki
on 30/10/2015, 09:01:59 UTC

Isn't it pre-determined when the debt should be payed back?

They probably use the money they borrow from other countries, that is worth less when they borrow it a couple years later, to pay the old debts.

Rinse and repeat.
Bonds on expiration are paid with the money from freshly issued bonds, so effectively they are rolled over to another period, be it 10, or 30, years.
This is repeated endlessly, each time the cost of the operation is higher. The cost doesn't matter however as FED can print the amount that is required.
This game is called 'kick the can'.