Debt as future investment

If debts are investment into future growth (like infrastructure), reduce its impact?

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While I wouldn’t argue that deficit spending is always bad, national debt itself doesn’t have any positive effects in economy. Government spending funded by taxes and bonds always means using private savings and making investment on behalf of private sector. In other words, you are drying up credits (which usually leads to higher interest rates) and executing investments against outlook made by the free market.

But I see your point. Since the game doesn’t have a notion of ‘constant economic growth’ in its simulation, you can’t perpetually increase your debts. GDP will stop growing at some point and you will be pushed by creditors to repay your debts because your capability to repay is capped. It would be nice if the game can take such into consideration but would be quite tricky if it is impossible to introduce uncapped GDP simulation.

If there should be something to make debts more bearable, I’d suggest using a little bit complex depiction of debt interests. As far as I know, most government bonds are issued at a fixed rate. That means a sudden increase in rates (in the game, usually happens after degrades in credit ratings) won’t cause a spike in payment of interests since most of your debts are still ones issued quite a long time ago.

tl;dr - using weighted average when calculating interest payments might mitigate the issue


Sure, and I see your point, any improvement would be better than what it is now.