It does have to pay interest on that debt to all the bond holders, if it doesn’t then the bonds lose value and everyone that owns them trys to offload them.
if the interest is just as high as the general inflation, then the government can just take out extra loans to serve the interest without actually increasing the real total debt, because the nominal increase in debt is just eaten by the inflation.
It does have to pay interest on that debt to all the bond holders, if it doesn’t then the bonds lose value and everyone that owns them trys to offload them.
if the interest is just as high as the general inflation, then the government can just take out extra loans to serve the interest without actually increasing the real total debt, because the nominal increase in debt is just eaten by the inflation.