Governments worldwide make huge debt each year. From whom or what is the money ‘borrowed’ from, and is any of it ever repayed?

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Governments worldwide make huge debt each year. From whom or what is the money ‘borrowed’ from, and is any of it ever repayed?

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4 Answers

Anonymous 0 Comments

They sell their debt. In the case of the USA, we sell treasury bills which is like loaning money to the government. It is always paid back.

Anonymous 0 Comments

Credit on the belief that there will be more money in the future. Sometimes countries default, then their creditors won’t give them as good terms on future loans. Sometimes the debts are forgiven. For the most part though they are paid.

Anonymous 0 Comments

The money is borrowed from anyone who buys the debt. If grandma ever gave you a US savings bond, she gave you a small portion of the US debt, which you now own.

It is repaid on a regular basis based on the terms of that debt. If you buy a 10 year no coupon savings bond, they pay you back 10 years from purchase.

Anonymous 0 Comments

The governments’ debt is in the form of bonds that they issue to investors (individuals can buy, but most are held by institutional investors like mutual funds, pension plans, insurance companies, university endowments). Bonds have set terms w/ regard to interest and time frame. The US government has never defaulted on any of its debt. As old bonds mature, new bonds are issued. When more bonds are issued than mature, the debt increases. When the government issues fewer new bonds than mature, the debt goes down.