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.
In: Other
It’s simpler than the other posters are saying. We could make it complex, but at the core, **the debt is just money**, and the higher the debt, the more money that country has created. So of course the richest countries have the most debt.
There are rich countries that don’t have a lot of debt, but they are exporting nations that really on other countries printing money for them. Someone has to create the money and buy those exports, and it makes sense the biggest economies like the USA, Japan, China are the ones to do so.
You are thinking of debt like, you don’t have money and then you borrow it from someone who already has that money to be able to buy something. That’s not at all what this is. Government “debt” is the money that government created on the spot. And think about it, how are you supposed to pay your taxes if they didn’t print that money first, before they collected the tax second? Spending = creation of money, taxes = un-creation of money, debt is the bonds (also money) they sell (created on the spot) equal to that money for the meantime.
Latest Answers