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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So debt in general is concept that I give you x amount money now and you give me the promise to pay me back in some kind of agreed timeframe. Example: I pay your 10USD meal now and you give me the promise to pay me back next week. The transaction that happens now is I open my wallet and give i.e McDonalds 10 USD for your desired meal. McDonalds gives you your desired meal and you eat it. The physical representation or service (valued 10USD) has been consumed by you. Now I am left with a 10 USD thought credit held by you. Now our relationship comes into play. How well do we know each other. Are we strangers? Are we (close) friends, siblings or is one of us publicly known?
If you are famous and made someone else pay for you it might not reflect well on you. It might affect you social acceptance in some kind of community. You might want to repay me to not lower your perceived social standing in certain communities. Also legal problems probably will arise at some point.
TLDR Debt is a future commitment to pay amount X back that has been spent the the past. The trust component between parties is the one thing that keeps it afloat. If no (trust/hope of repayment) whatsoever no one will ever lend you anything.
Hope I could somehow help.
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