source avatarJazz Lights

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Your observation is valuable in correcting the misconception that government bonds are equivalent to household debt and must be fully repaid through taxes. Interest payments (debt servicing costs) are a definite burden, and if interest rates rise, this burden can increase rapidly. Even though the system allows for full refinancing, there are associated costs and risks. Issuing bonds requires their certain absorption in the market, which can become difficult during periods of rising interest rates or weak demand.

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