What Happens When a Country Accumulates Too Much Debt?

Economic Cycles & Debt - Excessive debt coupled with economic downturns can lead to financial bubbles bursting, forcing countries to choose between defaulting or printing money [1] - Historically, financial crises have been triggered by financial excesses and the costs of wars, as seen with the Dutch, British, and the US [2] - Governments often resort to printing money to manage debt, which devalues the currency and raises inflation [1] Internal Conflict & Political Extremism - Economic hardship, declining living standards, and wealth inequality exacerbate internal conflicts among different groups [3] - Political extremism arises as populism of the left seeks wealth redistribution, while populism of the right aims to preserve wealth [3] - Rising taxes on the wealthy during turbulent times can lead to capital flight, reducing tax revenue and hollowing out the economy [4] Societal Instability & Leadership - Capital flight and turbulent conditions undermine productivity, shrinking the economic pie and intensifying conflicts [5] - Populist leaders emerge, promising order and control, challenging democracy and potentially leading to strong, authoritarian leadership [5]