[jsmcgd]

I don't think anyone does expect the debt to be paid back. However it is expected and required, that at the very least, interest payments on the debt are paid so there isn't a default, which would kill the bond market and end government deficit spending.

Interests rates do not need to increase very much at all at this point, so that 100% of tax revenues would be needed just to cover the interest owed by governments. At this point (actually before) the currency is effectively dead and hyperinflation is inevitable, unless:

1) there is a draconian cut to government spending to match tax revenue, or 2) the current system is abandoned to one that is backed by hard assets (which would include a severe cut in spending but could also include a taper)

1. is politically infeasible, so we will default to 2. after a significant amount of economic pain. The US Dollar and most western fiat currencies are dead and are already long in the tooth by historic standards.

[throw0101a]

> However it is expected and required, that at the very least, interest payments on the debt are paid so there isn't a default, which would kill the bond market and end government deficit spending.

Russia defaulted in the late 1990s and a few years later people were lending again (at higher rates). Greece had many well-publicized problems in the earl 2010s, and yet in 2019 their bonds had negative yields:

* https://apnews.com/article/067eda5047d740f9a15692dea5944326

[guiriduro]

If the ECB buys the debt (it has an infinite supply of money after all), what is the problem? That should keep interest rates on sovereign debt down. Inflation right now is systemic, mainly the result of oil price surges - I'd argue that its OK, we want high oil prices because we want disincentives on activities that produce more CO2 and incentives for efficiency - hell, hike the price now. Of course the downside could be social, and that falls on governments to mitigate, which is why I argue strongly that they continue to heavily deficit spend and they get the support of the ECB to do so.

[Aerroon]

>Of course the downside could be social, and that falls on governments to mitigate, which is why I argue strongly that they continue to heavily deficit spend and they get the support of the ECB to do so.

Which will then build up more pressure until something finally goes wrong and your economy implodes. The consequences aren't just social that the government can deal with. Look at the 1930s. There's a real chance that a poor economy for an extended period is going to change your democracy, if you remain a democracy at all.

The ECB can only buy the debt by creating more money and increasing inflation. It might be hidden for a while, but just because we don't know how to measure it doesn't mean it won't eventually show up in an unexpected place (or managing it will depress the economy long-term).