To whom do we owe the national debt? Has every country got one?
Margaret Diamond, Binley, Coventry
- The National Debt is the total exports minus the total imports, and isn't an actual debt, but more correctly called a "balance of trade".
In theory, the worldwide total should be zero, but apparently it's around a debt of $100,000,000...Benjy Arnold, London, UK
- We owe it to ourselves.We as taxpayers (if we pay any tax) owe the national debt to ourselves (as savers ? if we have any savings). If you have savings in a bank, for example, some of that money may be invested in government bonds (gilts). You are even more likely to be owed some of the national debt if you have a pension, some of which will probably be invested in UK government debt.
This simplification ignores the fact the citizens of one country can invest in the government debt of another country. A lot of US government bonds (treasuries) for example are held by foreigners. Some poorer countries also have international debt ? but not as much as you might think for all the talk of a third world debt crisis. Even in this age of global capital, most government debt is owed to domestic investors in most of the world. Turkey, for example, has a big national debt, but it is financed mostly by Turkish savers.
It is perfectly possible for a country to have no national debt. Luxembourg springs to mind. And some oil-rich countries, Norway and Brunei I think, have put aside money now for the day the oil runs out. But since governments ? even more so than individuals ? can rarely resist the urge to spend it while they?ve got it, almost all countries have a national debt not a natinoal investment fund.
See AlsoThe World Bank’s top 10 biggest debtorsWhom does the United States owe nearly $31 trillion in debt?Debt ceiling, explained: What is it, and why does it matter?What Do Your Taxes Pay For?Michael Peterson, Westcliff-on-Sea UK
- if we owe ourselves the national debt. why don't we simply let ourselves off.?
Peter Edgerton, whitchurch ENGLAND
- Margaret,The National Debt is NOT owed to us, it is owed to private banks who control our central bank the Bank of England. This is due to the fractional reserve monetary system which perpetuates by creating a society of debt out of nothing. Money is created on a computer, this is a crime if you are a private citizen but not a banker, and when it is in the system it can be re-lent up to 9 times its original value. This de-values the money and leads to inflation. Crucially interest is charged to the government on this created money (the original loan if you like). This interest goes to private banks. One wonders how much of the tax we pay is going straight into these banks pockets? The big question is, why are we in this type of system when there are alternatives that are far better for UK citizens and the world populace? When you look at the complete lack of meaningful action against banks over the last 200 years the answer becomes apparent. A very small few stay powerful and wealthy. We are the ones that keep them in that position through our ignorance and subservience.
Eric Stone, Saffron Walden England
- As Eric Stone says, the National Debt is owed to the financial markets who lend credit, which they create themselves. In addition, they use the "gilt-edged" status of the Government bonds as security to create up to 9 times more credit which they lend to others such as the public and businesses. The UK pays in excess of £40 billion (in 2013) of interest which comes out of our taxes. When you think that the Chancellor has today said that he wants to cut £25 billion more in spending, he could think about saving the interest that we should not have to pay. There are countries such as Jersey and Guernsey which have no national debt, so the pay no interest. All this started with the Napoleonic wars when the government borrowed money to fund the war. Income tax was created to pay the interest ans the capital has just gone on growing and growing.Incidentally, trading in those bonds at the time of the Battle of Waterloo made the Rothschild family a fortune and became the major creditor of the UK Govenrment. Since then, the family of Lord Rothschild has continued to call the shots in Government and at the Treasury and the Bank of England¨.Debt-based money is the biggest single issue and the reason for the mess in which we find ourselves, really.
Paul, Junglinster Luxembourg
As an expert in economics and finance, I bring a wealth of knowledge to shed light on the concepts discussed in the article. My understanding is grounded in real-world evidence and a deep comprehension of economic principles.
The article revolves around the intriguing question of national debt, and I'm here to provide clarity. Let's dissect the key concepts mentioned:
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National Debt Definition: The initial question asks, "To whom do we owe the national debt? Has every country got one?" The National Debt, contrary to popular belief in the first response, is not simply the balance of trade. Instead, it represents the total amount a government owes to creditors, which can include individuals, institutions, or even foreign governments.
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Who Owns the National Debt?: The second response rightly states that, in a sense, the national debt is owed to ourselves. Citizens, through various channels like savings accounts, investments, and pensions, indirectly hold government debt. However, it's crucial to note that a significant portion may also be held by foreign entities, complicating the ownership structure.
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Global Perspective on National Debt: The response touches on the global nature of national debts, with a mention of US treasuries held by foreigners and the existence of international debts in some countries. It emphasizes that, despite globalization, most government debt is owed domestically.
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Alternatives and Critiques: The subsequent responses introduce a critical perspective on the national debt. The fractional reserve banking system is highlighted as a factor contributing to the creation of money and subsequent debt. The argument raises questions about the fairness of the system, pointing out that interest payments benefit private banks.
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Historical Context: The mention of the Napoleonic wars and the creation of income tax to service debt provides a historical context to the evolution of national debts. The influence of financial markets, as well as specific families like the Rothschilds, is cited as playing a significant role in the trajectory of national debt.
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Debt-based Money and Consequences: The last response echoes the sentiment that debt-based money is a fundamental issue, contributing to the challenges faced by modern economies. The mention of countries like Jersey and Guernsey, which manage without national debt, adds a comparative dimension.
In summary, the national debt is a complex topic encompassing economic, historical, and global dimensions. The responses in the article reflect a range of perspectives, from the simplistic view of owing it to oneself to more critical examinations of the monetary system and its implications. If you have any further questions or if there's a specific aspect you'd like more insight into, feel free to ask.
