There’s a lot of scaremongering about government debt

Here is this week's Scotonomics, we hope you will enjoy.

An image currently doing the rounds from the Visual Capitalist website shows Japan sitting in the middle of indebted nations with a whopping 230% debt-to-GDP ratio.

The message: most countries in the world are in debt up to their eyeballs. The “world debt level,” according to the IMF is now almost 95% of global GDP. That’s $111 trillion.

If that’s the case, who are they borrowing money from? Mars?

These countries can’t surely be borrowing from each other; if they were, why don’t they keep their money so they aren’t in debt? Or maybe the USA borrows from China and China borrows from someone else, but again, that’s just a circular way of lending to each other.

Governments are said to “borrow” when they sell bonds, sometime