WHY IS DEBT PERMANENTLY INCREASING?
WHY IS DEBT PERMANENTLY INCREASING?

Summary/Abstract: The study analyzes the reasons for the growth of public debt in highly developed countries. This phenomenon is aggravated by the fact that over the past ten years in the United States and other developed countries, sovereign debt has increased dramatically, which threaten not only these countries, but also global economic stability and security. The article examines the close connection of the ever-growing problem of public debt with the macroeconomic equilibrium, in particular the impossibility of equality of aggregate supply and demand, the connections of which in developed countries use monetary and fiscal demand stimulation. At the same time, monetary policy faces the problem of a liquidity trap, which is exacerbated by the current global financial and economic crisis, which is a crisis of excess production of reserve currency, especially US dollars. The symbiosis of the crisis of overproduction and excessive emission of the US dollar and other reserve currencies has provoked the appearance of negative interest rates of banks on both passive and active operations. Finally, it can be said that the monetary management system has exhausted itself and the goal of stimulating state-owned demand has been assumed by the governments of the countries, which can be considered as the main reason for the continuous growth of public debt.

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