What happens when a country pays off their national debt?
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In short, they dont. for example, the only time it happened in the US was January 8, 1835, President Andrew Jackson paid off the entire national debt, the only time in U.S. history that has been accomplished. However, this and other factors, such as the government giving surplus money to state banks, soon led to the Panic of 1837, in which the government had to resume borrowing money.
This didn’t last long. Governments may issue debt to finance essential public investments, to meet the demand from institutional and individual investors for safe assets, or to prolong unsustainable overspending and enable graft. How well the borrowed money is spent has a lot to do with whether it will be repaid.
I think only Jersey and Guernsey which have no national debt, but that is extremely complicated as they are not countries but self-governing Crown Dependency (The British Crown).
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