National Debt: How Countries Borrow and Its Global Implications
Imagine you want to get a new bicycle, but you don't have the money to do it. So, you borrow ₹ 1,000 from your friend and say you will return ₹ 1,100 after a month. The extra ₹100 is interest for borrowing money. Borrowing money is very similar to what countries do when they borrow money for their domestic needs like roads, hospitals, or education.
Also, there can be scenarios where you have taken multiple loans and find it hard to pay them. Debt consolidation came into picture here, with its help you can combine all your debts into one single loan. This is also applicable in case of the national debt but the mechanism and context can differ a little .
What is National Debt?
National debt is the total amount of money that a country owes to others. This is similar to ho...