00:01
So government debt is very different from yours and mine.
00:04
The main way in which it is different is that government debt is triple a rated.
00:09
In other words, when the government borrows money, anyone who is lending the government money has the closest thing they can to a guarantee that the government is going to be able to pay that money back.
00:21
So it's very safe.
00:24
There's a very low default risk.
00:26
And consequently, the government can borrow at very low interest.
00:30
Rates, which means that there's very little borrowing cost over time.
00:36
Whereas if i borrow money via a credit card, i may pay 20 -something or 30 -something percent interest on that.
00:44
Meanwhile, the government can borrow money for one, two, or three percent interest, let's say.
00:51
Now, in the long run, the government does not need to entirely pay off the debt, but there are a lot of benefits that go along with that.
01:00
Chief among them is the fact that if you are not borrowing money, you are not having to pay the costs of borrowing that money, namely you're not having to pay any interest on that debt...