The article explores how domestic and foreign debts impact a country's economy. It uses a model where different generations make financial decisions, and governments choose taxes, spending, and debt management. In this model, political factors can affect a country's ability to handle debt, and economic shocks can impact debt costs. The study finds that default decisions on debts can be influenced by various factors, such as minimum debt returns. Overall, the research shows that political and economic factors can complicate how countries manage their debts and finances.