Just what the hell is national and global debt anyway?Please note I am not an economist - this is ju
Just what the hell is national and global debt anyway?Please note I am not an economist - this is just my take as a newsjunkieClocktopuses: does anyone know any links hat eli5 global/national debt?? I found a global debt calculator that says $6.6e13 is owed globally in national debt, but I don’t get who it’s owed to ^^“Planty: From what I understand : governments issue bonds to anyone who wants to buy them. When a bunch of bonds have been sold that must eventually be repaid, that is what is called national debt. The thing to note is that governments can keep issuing new bonds to pay off the old bonds, and that system can go on forever as long as the country manages finances well. All sorts of entities can sell bonds. When you hear in business news about credit ratings, that is what impacts the amount of interest is involved in the bonds. The lower the credit rating, the more the ratings companies think that the government (or entity) might be crappy at managing their finances, and therefore the greater likelihood that you won’t get your money back. They’ll default, which means the bonds will be worthless, and you will have just given your money to someone who won’t repay it.To make up for this, those bonds with lower credit ratings have a higher interest rate, which means that in case you do actually get your money back, you could make some actual money off of it. Sometimes… boatloads of money. If you get paid. Certain countries are known for managing their finances well, so they have a higher credit rating, and pay way less interest, but are thought to be appealing because they are safe - at least you’ll get your money back and maybe a touch more. If you live in a country where banks aren’t paying any sort of interest rate in savings accounts and CDs, and you don’t want to try the wild ride that is the stock market, bond markets can be another option with people who have enough money to cover their bills and have some left over.In some countries it is also considered patriotic to buy your own governments bonds, like you’re helping to fund projects that will benefit you directly like an improved highway system or something. So when you talk about global debt, it’s this giant web of things we loan to each other, it’s how we literally give total strangers the fruits of our labor and hope we get it back someday. Another thing to consider is the length of the bond, the longer the time until you get paid back, usually the higher the interest rate, so the more money you can make. Of course, it’s also the greater risk, because you’re betting that no one really fucks everything up horribly for a longer period of time.Your debt is owed to whoever thought you were smart/capable/reliable enough to buy your bonds. You issue new bonds to pay off old bonds, and also for any reason you might need more money - to cover things in the budget like health care or to modernize the military or to pay government employees etc.Speaking of bonds and patriotism, war bonds are interesting, there’s a lot of art / propaganda used. This is from the USA, for WWII when soldiers were still drafted. Anyone in the US looking at the poster at the time would’ve known someone in the military.You wouldn’t want your drafted family, friends, coworkers going to war without proper equipment and medical care would you? Better buy those war bonds.Pretty much everything surrounding war is awful, yes. -- source link
#bonds#government bonds#economics#global economy#national debt