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?

Question

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?

In: 252

Answer 1

A country is not just a one big blob, not a singular entity.

It has branches that financially totally sepearate, you can’t just willy-nilly move money around.

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Another great example is an enterprise.

Simplified: while there is an owner, the enterprise itself is a separate entity, the owner can’t just take or put in money on a whim, without any valid reason. There are rules about money flow and taxation and the enterprise have responsibilities like payroll. You can get a divident, the enterprise can pay salary to the owner.

Technically the your own enterprise can give you a loan, which you would owe to the enterprise.