How Does a Country’s Debt Affect its Citizens?
Currently my country, Philippines, has tons of debt and it keeps increasing every year.
There’d be stats like, each Filipino has 120k php (around 2.3k usd) of debt. But of course the individual doesn’t directly pay for the debt but rather supposedly taken from the taxes we pay.
So how does it actually work?
Either by reducing the amount of money going towards public services like road maintenance, health care, emergency services, and consumer protection agencies so more money can go to paying off the debt.
Or Alternatively a government can increase taxes or levys to pay the debt but most tax increases will effect the lower and working classes meaning there will be less money a person can spend, and businesses will pass the cost onto consumers to pay the new government levy.
The citizens are indirectly affected because public services funds are reduced and/or taxes are increased. I understand now, thank you.