WhIs there a potential problem if governments continually finance goods and services with borrowed money?at is a treaty?

2 answers:

7 0

The reason why it is a problem if governments continually finance goods and services with borrowed money is that eventually the interest owned on these loans will compound to a point where it becomes nearly impossible to pay back.

alukav5142 [94]4 years ago

5 0

Is there a potential problem when governments continually borrow?

Yes, eventually their debts must be repaid with interest.

A classic example in history was the experience of the French government under the Bourbon dynasty, which ultimately gave way to the French Revolution.

The French monarchy was the envy of Europe, and the Palace of Versailles maintained the most glorious lifestyle you could imagine. The royals and aristocracy lived large – too large. The government had accumulated 4 billion livres worth of debt by 1789. 1 livre in their monetary terms then = approx. $4 in our monetary terms in the US today, so that’s a $16 billion national debt. 40% of the government’s budget was going to pay interest on debts. And it kept getting worse. In 1786, for example, government income was 357 million livres and expenses were 555 million. So that's about 200 million added to the national debt in just one year. The debts kept piling on, and it was reaching a point when lenders were starting to say no to any further loans. The government had reached a position where it could not go forward without levying even more oppressive tax burdens on the people, and the people weren’t willing to pay.

It should be mentioned that, along with the regular lavish costs of the royalty and upper class lifestyles (all paid by the lower classes), a big part of the government’s debt had come from wars. There was the 7 Years War fought in Europe (1756-63) – known as the French and Indian War over here in the colonies. Losing that conflict didn’t sit well with France. And so when the colonial Americans broke out in revolution against the British monarchy, France devoted enormous financial aid (as well as officer support) to the Americans. The cost to France for supporting America’s revolution added up to 1 billion livres (about 4 billion in today’s dollars). This is part of what put France’s debt problem over the edge. When bankers and lenders would no longer give further loans to the French government, the series of events that led to the French Revolution fell into place.

You might be interested in

How was Johnson’s Economic Opportunity Act going to help the underprivileged break the poverty cycle?

sleet_krkn [62]

Answer:

Economic Opportunity Act (EOA), federal legislation establishing a variety of social programs aimed at facilitating education, health, employment, and general welfare for impoverished Americans.

6 0

3 years ago

In Gibbons v. Ogden (1824), the Supreme Court ruled that in business disputes

docker41 [41]

Answer:

A)Gibbon’s federal license allowed him to operate in multiple states:)

Explanation:

7 0

3 years ago

Include a brief description, the historical facts, and the impact on the world as a result. Each of the Olympic games should hav

jeyben [28]

The city of Berlin was selected as the seat in 1931, more than a year before the appointment of Adolf Hitler as Chancellor of Germany. It is worth noting the first intention of boycott of the games by the United States team, but finally they chose to participate. Hitler took advantage of the sport to demonstrate to the world the "magnificence" of Nazism and commissioned an elaborate program of dissemination to the propaganda minister Joseph Goebbels. Spain boycotted these Games and did not participate.
The Beijing 2008 Olympic Games (officially called Games of the XXIX Olympiad) were held in Beijing, capital of the People's Republic of China, between August 8 and 24, 2008. However, the soccer tournament began two days before, August 6th. After its conclusion, the XIII Paralympic Games were held, which began on September 6, being held in the same city, and ending on the 17th of the same month. The Olympic Games in Beijing 2008 became the most expensive event in Olympic history, reaching a cost that would have exceeded 44 billion dollars, nearly tripling the final budget of its predecessor, the Athens 2004 Olympic Games. previous events, the organization of this event faced political and ideological problems since its election, on July 13, 2001. Along with the criticisms regarding the air pollution problems that the host city had, the accusations of violations of rights Humans who have received the Chinese regime by an important part of the international community provoked various demonstrations, which even affected the course of the Olympic torch. On the other hand, another important part of the international community called not to mix political problems with sport.
The Olympic Games of Munich 1972, officially known as the XX Olympic Games, was an international multi-sport event, held in Munich, Germany Federal, between August 26 and September 11, 1972. Participated 7134 athletes (6075 men and 1059 women ) from 121 countries, competing in 23 sports and 195 specialties. The 1972 Olympic Games were muddied by a terrorist act. On September 5, Palestinian terrorists first killed two Israeli athletes, and took nine others hostage, demanding the release of more than a hundred Palestinian prisoners. After a frustrated rescue attempt, a massacre broke out in which the nine Israeli hostages and a West German police officer, as well as five of the eight terrorists, were killed. Despite what happened, the Games continued with normalcy, after being suspended for only twenty-four hours. Some athletes left the Olympic village in Munich.
The Olympic Games of Mexico 1968, officially known as the Games of the XIX Olympiad, was an international multi-sport event held in Mexico City, Mexico, from October 12 to 27, 1968. After two unsuccessful candidacies, the Mexican capital was Selected city host of the event in the 60th Session of the International Olympic Committee. Various sports competitions of test invalidated the present fears related to the altitude of the city. For its part, the Mexican government sought to promote the country through the event. In contrast, the student movement used it to draw attention to government abuses. The conflict between the two parties reached its climax ten days before the opening ceremony, when the Mexican Army attacked a demonstration in the Plaza of the Three Cultures and caused the death of dozens of people.
The 1980 Moscow Olympics, officially known as the Games of the XXII Olympiad, were held on this occasion in Moscow, capital of the Soviet Union, between July 19 and August 3, 1980. The candidacy was launched last moment and Moscow won the election by 39 votes to 20 received by Los Angeles at the Session of the International Olympic Committee in Vienna. The Moscow Olympics are remembered for the division of the Olympic world. 5179 athletes (4064 men and 1115 women) from 80 countries participated, competing in 21 sports and 204 specialties. Due to the cold war these games were boycotted by the US and some of its allies.
The Olympic Games of Los Angeles 1984, officially known as the Games of the XXIII Olympiad, were held in Los Angeles, United States, between July 28 and August 12, 1984. 6829 athletes participated (5263 men and 1566 women) from 140 countries, competing in 21 sports and 221 specialties. Although in total 14 states abstained, it was notable the absence of countries that used to be in first positions of the medal table, such as the Soviet Union, East Germany and Bulgaria. In fact, at the Montreal Olympics in 1976, the countries that were now the protagonists of the boycott had won 58% of the total gold medals. For its part, in Los Angeles, Romania won the largest number of Olympic medals in its history.

6 0

4 years ago

Read 2 more answers

So...I'm doing a Greek Myths Project and it said to choose a Myth to retell. It must have a god in it. I chose to do Heracles (H

Wewaii [24]

Answer:

Demigods do not count as gods.

Explanation:

Demigods are half human, half god. They are not immortal, where as gods are immortal. Although, Heracles (Hercules) did become a god after he died.

4 0

3 years ago

What did the early civilizations have in common

likoan [24]

Nothing because the fact

7 0

4 years ago