I’ve once heard that the USA owns most of its debt to itself, how is that possible? How can you owe debt to yourself?
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The US makes its own money. When the federal government pays for a service (eg military contract) it simply gets federal banks to increase the money in those accounts. Money retains its value from tax (it has value because everyone needs enough of it to give back), but does not directly go to paying for government services (at least on the federal level), it is removed from circulation.
This is the case for pretty much any governing body that owns their own currency. The ‘national debt’ that the US owes to itself is the difference between how much tax it has collected/removed, compared to how much currency/value it has generated (or promised).
As long as inflation remains stable and the US dollar has appreciating value, the system works. Most of the national debt means functionally nothing and can continue to increase indefinitely.
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