If all countries increase their debt in difficult economic times, they can’t be borrowing from each other, so who do they borrow from?

Question

If all countries increase their debt in difficult economic times, they can’t be borrowing from each other, so who do they borrow from?

In: Economics

Answer 1

Countries don’t borrow from each other — they borrow from investors. Some may be bought by foreign governments, but in general its pension funds, insurance companies, mutual funds, university endowments and such who are buying the debt that governments sell.