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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Government spending and consumer spending are quite different. Consumer spending is more for immediate needs. If you are hungry, you check your wallet or bank account if you have enough money and then buy it from the shop. There is no reason to go into debt for food.
The government has a different problem. To feed the people, it can’t just buy food. It has to build a port. In order to build a port, you need roads to be built for the port. That is a lot of upfront investment that the country has to spend before a single ship docks at the port. You can try raising taxes but that also takes time to amass all the money. So you sell bonds. The investors hope that the future road tax or toll or port fees will pay back the investment in the long run.
So why do rich countries have a lot more debt? If the consumers are well to do, they will demand more variety of food. Then you have to build airports for fresh food or border crossing.
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