[quote=DomoArigato][quote=SD Realtor]What do you mean in the US?
The jury is still out. The question about the US will not be resolved for years. Check back with me in 20 years about the US.
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Can you show me a country that had its debt denominated in its own currency where a high debt-to-GDP ratio led to large increases in interest rates? Maybe interest rates are dependent on something other than just the size of the public debt?[/quote]
“This Time it is Different” lists 66 countries that “defaulted through inflation” between 1800-2008. 25 of these experienced inflation of greater than 40%/year for multiple years.
Defaulting through inflation is pretty much what you do when you can no longer borrow. “Can no longer borrow” roughly translates “interest rates are too high”.
There of course lots of factors in interest rates. At some point the size of the outstanding debt relative to the size of the economy or the governments income becomes a concern. Historically, it becomes a serious issue for lenders once it reaches ~90% of GNP.
