If All Large Countries Are In Debt, Who Do They Borrow Money From?

The citizens of a nation lend money to their government, which adds to the national debt. This is the most secure way of raising money from an economist's point of view. Many developed countries prefer this method of borrowing money. Just as it can do from its citizens, the government can also borrow money from foreign countries. The government can borrow money from foreign banks, international financial institutions, and other foreign investors, such as the World Bank and others, by issuing treasury bonds. In the US, these are called T-bonds. Interestingly, the country can even borrow money from its own governmental institutions and subsidiaries. The US, for instance, owes nearly $6 trillion to a number of its own federal agencies.