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Originally Posted by pylon
This is what I don't get, everyone is in debt. So lets just say the entire world is in debt. Who exactly is the entire world in debt to? Aliens? You would think there would be someone reaping the benefits of all this money owed.
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It's typically held by the citizens of the country, sometimes it is held by foreign entities. That's what makes the US debt that much more precarious than even Japan's debt. While it's true that Japan has over twice the amount of debt as GDP, they owe most of that debt to themselves. So the worst thing that could happen is they default on themselves. It's a lot more precarious when a large chunk of your debt is owned by a foreign country.