The USA and Chin have the highest debt in the world but i don’t understand the concept of them being some of the wealthiest countries, does that debt need paying off? How do they get this debt? Ultimately it just doesn’t make sense to me.
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Two possible links:
* loans can be a good idea. For instance, if you borrow $1billion to build a hospital, and then the hospital improves the citizen’s health in a way that generates more than $1billion (perhaps fewer hours/lives lost to illness/injury and thus more work & tax revenue), then the citizens benefit from the government taking this loan, and become richer overall.
* Richer countries get better interest rates (because they are more likely to pay the loan back) which means they can take more loans relatively safely.
So either loans create wealth, or wealth permits larger loans, or both, could help explain part of this pattern.
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>does that debt need paying off
Yes, and so far, the coutnries have payed all debts when they were due, and is predicted to be able to pay all the debts in the future.
And then they can take on more depts before all the old ones expire.
They might always have more debt each year, without ever failing to pay any of it back. THat might sound unsustainable, but with growth and inflation it is possible that this is sustainable. (Whether it is *actually* sustainable is another question, but it mathematically *could* be, and if the government invests wisely you’d expect that it would be).
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