Why are most countries in debt, who do they owe, and what are the consequences? Why do they go into debt in the first place?

Question

Why are most countries in debt, who do they owe, and what are the consequences? Why do they go into debt in the first place?

In: Economics

Answer 1

There is an old saying about debt.

“ If you owe the bank $5 million and you’re unable to pay it back, you are in trouble. …If you owe the bank $500 million and you can’t pay it back, your bank is in trouble “

There is a self-preservation aspect to national debts. Governments with large debts create a web of vested interest across many other governments and global financial systems to make sure those debt payments continue to be made.