eli5: Why is the US commonly called the “wealthiest country” if we have 30T in debt?

Question

eli5: Why is the US commonly called the “wealthiest country” if we have 30T in debt?

In: 5

Answer 1

Debt is strange. Its not like capital. If 3 people have 10T in capital, there is a total of 30T in capital. 30T in debt doesn’t mean 30T of actual money is owed, only that the *total debt* is 30T.

A borrows 100 from B, B borrows 100 from C and C borrows 100 from A. Their capital hasn’t changed since they all borrow 100 from each other, but you created 300 in debt that does have to be repaid at some point.