Re:Study identifies reasons for soaring nuclear plant cost o...
by dragonwriter on Friday November 20, 2020 @11:04PM
(#25167798)
> The idea that it can give back less stuff but that is OK because it is a government is a foolish idea.
Anyone can pay back less real value if they have terms where the rate of interest is lower than the real rate of inflation.
Creditors of a government can mitigate the risk of that happening due to the policies of the debtor government by setting repayment terms other than in fiat currency of the debtor.
They often choose not to; heck, in the case of the US, it's happened that they choose to lend despite negative nominal rates, even before inflation.
Anyone can pay back less real value if they have terms where the rate of interest is lower than the real rate of inflation.
Creditors of a government can mitigate the risk of that happening due to the policies of the debtor government by setting repayment terms other than in fiat currency of the debtor.
They often choose not to; heck, in the case of the US, it's happened that they choose to lend despite negative nominal rates, even before inflation.