Why can the U.S. government borrow at some of the lowest interest rates ever, while Spain can only borrow at exorbitant rates that threaten to drive it into bankruptcy? The difference isn’t their debt and deficits. In 2011, U.S. debt was 98% of GDP, its deficit 10% of GDP; Spanish debt was 69% of GDP, its deficit 8.5% of GDP. The difference is that the United States has its own money, the dollar, while Spain operates on foreign money, the euro.
Fighting Inflation, Ruining Economies
Why can the U.S. government borrow at some of the lowest interest rates ever, while Spain can only borrow at exorbitant rates that threaten to drive it into bankruptcy? The difference isn’t their debt and deficits. In 2011, U.S. debt was 98% of GDP, its deficit 10% of GDP; Spanish debt was 69% of GDP, […]
June 26, 2012