Why is the World in debt, how do we pay it off, and why should we care?
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I owe you 100 bucks, you owe Dave 100 bucks, and Dave owes me 100 bucks. It looks like there’s 300 dollars of debt in the world, but we’re really all just at net 0. In reality the numbers don’t quite line up exactly even like this. There’s still definitely countries that owe more or less somewhere, but it demonstrates how misleading debt numbers can look.
By investing in each other’s countries, we can have buffers with each other where we have more or less money available based on our own individual economies. We can also create favor between countries by having regular trade agreements. There’s also an economic incentive to not have trade disputes or even wars amongst ourselves. No one is paying debt to a country they’re currently at war with.
Obviously, it’s an oversimplification, but it’s ELI5.
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