Critical Reasons a Nation Will go Bankrupt.

[Jasz]

There are five main reasons a nation will face bankruptcy. Those five things are: Government overspending, Over borrowing, Government waste, High unemployment, Inflation, and Last but not least high taxes. These are all very important reasons why a country will go into bankruptcy. I will go into detail on each one of these reasons.

A nation will go bankrupt if its creditors decide that it has become a bad credit risk. As creditors grow in number and scarceness, the costs of borrowing increase, and those costs eventually become too high for the borrower to bear. That's when a nation is at risk for defaulting on its international debts.

If it continually prints money to cover its financial problems, the government's money will eventually become worthless. A government may cut benefits and services in order to reduce expenses. A government may have trouble paying back the interest on its national debt.

Multinational corporations, banks, and governments all borrow large sums of money. This often leads to an economic crisis and/or a sovereign debt crisis. These crises are caused by the high government borrowing, a collapsing exchange rate for the home currency and rising inflation caused by the large amount of cheap (or free) money printed into existence by central banks. When this happens, high taxes and interest rates must inevitably be introduced in order to control money supply levels and protect the domestic economy.

 

[btaliat]

I will give it to bad policy of government. Most time, government does embark on some bad policies which may make some investors not to invest in such a country. For instance, banning of cryptocurrency has led to shutting down of some big companies in China. Another factor that may likely cause bankruptcy for a country is if there is no check on the population growth. Population must be growing in the same pace with development in a country. But the moment this is not so, a country may be inflated with many people that she may not be able to cater for which may indirectly lead to bankruptcy.

 

[eldavis]

Corruption is a huge cause for a country to go bankrupt. Like here in my country, the government keeps on borrowing and borrowing from world banks or other countries, but the painful thing about this is that we the citizens are not even seeing what they are using the money for, there is still no constant electricity, bad roads, high rate of unemployment, our schools and hospitals lack good and modern facilities. Yet we hear stories about how a government official has stolen Money.

 

[Kingsley]

For me i strong believe one of the major reason any nation will go bankrupt will be because or due to "bad" leadership, to buttress my point I will use some countries as case study. When we consider a country like Nigeria for an example it is no more news that we have depleted our foreign reserves and we are heavily indepted to o the nations like China and the likes, this is not to talk about the myriad of loans we have accessed from the IMF and Worldbank, and yet there is nothing to show for it so far far good the level of inflation, poverty, unemployment, insecurity and o the negative vices keeps increasing. In the previous administration things were bad but it has never been this worse in Nigeria this is happening as a result of the poor leadership we are having today in Nigeria, they are all set of corrupts leaders and they don't have the interest of the people at heart.

In the countries like Zimbabwe they were doing well too but since they sent thrnwhites away and the blackd took full control of the administrative structure things has gin very bad for them so the problem lies with leadership.

 

[Caramelle]

Unabated and top-level corruption can lead a country to bankruptcy. The political administration's greed and unrelenting desire to amass wealth for themselves and their families will usually result in policies that oppress people through taxes and restrictive laws. To justify the need for taxes, the government will usually cite reasons such as programs that support free education or subsidies for some selected sectors of society. In fact, such programs could have sufficient financial backing if taxes were efficiently collected and properly used. Such administration will ransack the nation's coffers and use international loan facilities to cover up its shortcomings. In order to pay its debts, it will export its own people and rely heavily on their remittances. In the process, that government will neglect developing its own natural resources and their development and utilization. It will then resort to obtaining more loans that are subject to more stringent conditions that could take control out of the government's hands.​

 

[Kendy]

In all honesty, I do not think a Country can go bankrupt, this is more of a false hasty conclusion. Firstly, if a country fails to repay its debts, due to mismanagement of funds and bad leadership, it does not go bankrupt; instead, it defaults on the loan. Secondly, it should be clarified that the government defaults and not the nation. Albeit, a country's assets cannot be confiscated by its creditor. Practically, governments pay their bills using income from taxes and investment. However, just as how we as individuals often spend beyond our means and resort to loaning money through available alternatives, a government does it by issuing bonds with the promise to pay back the value of the bonds with interest rate at its maturity rate.

A Nation's debt is also known as sovereign debt which consists of internal and external debts. Default happens due to a nation’s inability or unwillingness to repay its debts. The latter often happens when there is a change in governing party of a nation: new government would default on the debt it inherited from its predecessor. There are also various reasons as to why a country declines to pay its debt which is the cankerworm which is deeply eating into the fabric of every society known as "corruption." Corruption has made it that a nation's body of authority will declare missing funds and blame it on either a monkey or a snake which has swallowed the money. This is very hilarious yet annoying and degrading because it makes it looks like we're going back to the primitive days instead of moving forward.

 

[Abigael]

A country going bankrupt is just one of the worst things out there. It can lead to so much economic crisis for the people living in that country. You will find that everything, including those essential things like food and medical care will be very expensive.

The government taking huge loans from the world bank is one thing that cause this bankruptcy. Especially when hard times like the pandemic hits unaware and so the country is unable to pay the loan.

This will lead to the country increasing taxes highly which will affect so many people's finances. Since the government leaders are the ones who are in charge of how the economy runs, it is great for a country's citizens to choose them wisely.