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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The absolute number of dollars is less important than the debt to GDP ratio. Paying off the debt doesn’t matter if the countries GDP keeps up with or outgrows the debt.
However, the debt in the US is greatly outpacing the GDP these days, so it is a problem.
The US has one weapon that allows us to sustain this longer than you would think, and that is the fact that the US dollar is the global reserve currency, and most of global trade is transacted in dollars. We also have the biggest military, which allows us to protect that status.
However, Great Britain used to have that status and no longer does. Before that, it was France, and before that, the Dutch. The US will probably.lose it’s status at some point, but that would moat likely happen after a huge war or some massive global economic upset.
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