A debt doom loop is a vicious cycle where rising government debt leads to higher interest payments, which in turn require more borrowing, further increasing the debt. As investors lose confidence, borrowing costs rise even more, accelerating the problem.

This loop can spiral out of control, especially when economic growth is weak or political instability undermines fiscal credibility. Countries stuck in a debt doom loop may face austerity, inflation, or even default if the cycle isn't broken.

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