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It would seem that once a nation racks up loads of national debt, it can take hundreds of years to actually pay off and settle the bonds it issued when it originally racked up the debt!
Or rather, it can take hundreds of years for a government to finally get interest rates low enough to make it worthwhile to close out those old debts by rolling them over into newly minted government-issued debt, restarting the clock. The New York Times explains:
Now, prompted by record low interest rates, the British government is planning to pay off some of the debts it racked up over hundreds of years, dating as far back as the South Sea Bubble.
George Osborne, the chancellor of the Exchequer, said this month that in 2015 Britain would repay part of the country’s debt from World War I, and that he wanted to pay off other bonds for debt incurred in the 18th and 19th centuries.
That includes borrowing that may have been used to compensate slave owners when slavery was abolished, to relieve the famine in 19th-century Ireland and to bail out the infamous South Sea Company, which caused the bubble in 1720.
It’s funny that the reasons why governments accumulate such large national debts today are so little changed from what they were centuries ago. If Britain’s example is any indication, the United States will be refinancing the massive increase in national debt that it has incurred since 2008 trying to bail out its infamously failed government-sponsored enterprises (Fannie Mae, Freddie Mac) while greatly expanding its welfare programs (Obamacare, food stamps) for untold decades to come.