[emptybits]

I don't disagree with the important question of "Where does the money come from?" (Perhaps, it's also, "What didn't we fund because of this?") But FWIW, America is not unique in its serious debt situation and as a percentage of GDP, it's not unusual. Many EU nations are in the trillions of debt ballpark. Also China, Canada, Australia, etc. In fact, some of those nations exceed America in national debt per capita. [1]

I write this as a Canadian. We're also a nation of serious debt and I sometimes wonder where money for my government's big projects comes from...

[1] https://en.wikipedia.org/wiki/List_of_countries_by_external_...

[galaxyLogic]

From the link it seems that all major economic powers have a large "external debt". Then who are the creditors? If every country paid their debt, where would the money end up?

And I see from the article that "... while a country may have a relatively large external debt (either in absolute or per capita terms) it could actually be a "net international creditor" .

Wouldn't it be better to focus on this "balance of debts vs. assets?"

[konspence]

>Then who are the creditors? If every country paid their debt, where would the money end up?

At least in the US, most of the funds would end up in private citizens or corporations in the form of treasury bond repayments.

[kortilla]

>Then who are the creditors? If every country paid their debt, where would the money end up?

Bond holders. The us treasury holds bond auctions all of the time to raise money.

[gaius]

Then who are the creditors?

The best analogy I think is that we borrow the money from our future selves. If we invest it well then our future selves will enjoy the wealth in retirement. If we fritter it, we will be destitute in our old age.

[jchanimal]

Accountants and economists will think in terms like cash flow, net present value, opportunity cost, etc. In that way of thinking rationally you want as much debt as you can carry. State actors with control of money supply are even less worried about solvency.

[OscarCunningham]

The governments owe money to the public.

[y4mi]

The debt between European countries started with the second world war.

I was taught that this is one of the strategies chosen to discourage further wars, as declaring it would destroy billions of your own money.

[adrianN]

How is destroying billions if virtual currency a bigger discouragement that destroying billions of real, physical assets?

[adventured]

I agree with your point. There should be some skepticism that debt discourages, rather than encourages war. In more militaristic or authoritarian nations, if the debt were great enough, it could be an incentive to invade the neighbor/nearby country you owe it to in order to destroy it (assuming that scenario).

One of the several reasons Iraq invaded Kuwait, is that Kuwait refused to forgive $14 billion in loans (to Iraq) accrued during the Iran-Iraq war. Iraq's annual GDP in the 1980s was $40b to $60b depending on the year, to give you some idea of their ability to deal with the $14b in debt held by Kuwait (it was a considerable sum to them in the 1980s; it might be like the US owing Panama or Singapore $5 trillion today).

https://en.wikipedia.org/wiki/Invasion_of_Kuwait#Dispute_ove...

[srtjstjsj]

Another point of context, the US spent $2.4T on the Iraq+Afghanistan wars.

Invading Kuwait over $14B debt is a strange leap, since Iraq could far less expensively simply default. Anyway, it's the wrong direction -- $14B debt to Kuwait would make Kuwait less interested in invading Iraq for risk of forcing default. But either way, the value of the oil spoils (in either direction) dwarfs the cost of the debt.

[vkou]

Because generally, the rich are the ones who miss out in the former, while the poor miss out on the latter. Someone whose house gets destroyed will lose out a lot more from that, then from some small fraction of their pension fund going belly up because the belligerent nation has stopped making bond payments.

Since wars tend to be started by the rich (and their proxies), and fought by the poor, this puts skin in their game.

At least, that's the reasoning. I don't really agree with it.

[nxcho]

External debt is not the same as national debt and does not in it self say very much about the health of the public sector economy, since it includes private debt including accounts held in the country by foreigners for business reasons, tax evasion etc.