A lot of questions have been going through so many people's mind when it comes to the question of national debt, global debt, why the world is in so much debt, who is owing who and how can it be paid back? I will be sincere to you that if you say you understand money real well, then you must be really brilliant, maybe you are the president of a central bank or a financial or economic analyst. Money has even changed its meaning with cryptocurrency, so I can say that it is a large topic to be discussed.
One thing I am really concerned about when we talk money s debt, National debt, global debt and so on. who is loaning countries money in billions and trillions of dollars? How do the government borrow money and who will be paying this money.
It is no news again that National debt is the amount of money a country owes and this is dependent on the budget of a country. When a country spends more than its budget, then there is a problem, when the government spending is higher than the tax revenue, then there is a deficit and with deficit, the countries need to start borrowing money from other countries, international institution and companies. The borrowing country can use the money for whatever they need it for with no one to question them on how the money was spent provided the money is returned at the stipulated time in the stipulated way of payment.
Bond is another way that the government get into debt as the government can issue bonds which private individuals, companies and other companies can buy provided the country will be willing to pay when the money requested by the bond holder. Bonds aren't high interest investment with little interest on them.
Global debt is a combination of the debts held by individuals, government, financial corporations and non-financial corporations. There are a lot of countries in debt, like Japan with over 230% in GDP, Greece, Sudan, Venezuela, Lebanon, Italy, Eritrea, Barbados, Cape Verde, and so on. Countries like China are the biggest creditors in the world, the US is also one of the countries giving out loans to other countries. Although, all countries want to improve economically, it needs money to grow and since not everyone can finance their growth, then it needs to borrow money to do so.