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 government sells bonds, which are basically micro loans. Pay the government $100 for a loan, 1 year later they’ll give you back the $100 + a little interest.
Anybody in the world can buy a bond, and since the US government & the US dollar is considered extremely stable, it’s basically a guarantee return on investment. Because of this they are used to diversify portfolios, so a 401k might be 25% government bonds, 25% corporate bonds, 50% corporate stocks, for example. This helps protect your retirement from recessions and what not.
However it’s mostly banks and other private companies that own the bonds, not citizens directly.
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