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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A country is not exactly the same as its government.
The government needs to spend money on stuff (mostly, paying government employees) They get this money primarily through taxes. If they spend more than they tax, they have a deficit and generally borrow money to pay the bills.This debt usually takes the form of government bonds.
It does not matter how rich a country is if thr government doesn’t tax enough of that wealth to pay government expenses. Therefore the wealth of a country does not determine whether it is in debt; that is determined by the tax vs expenditure balance.
The primary lender in most rich countries is usually the people of that country. In the US’s case the primary lender to the US government is the various pension funds (not China, as some will claim).
Right away you can see one reason why rich countries can have more debt: the citizens (and various pensions/funds) have more money to lend their government. But also because rich countries have more trust and so can convince people to lend them money.
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