First wolrd debt?

[Carolina]

With all the talk about 3rd world debt we got into a discussion about how 1st world countries like the UK also borrow money.

Do they? and if so what for? And do they manage to pay it all back each year? and who do they borrow it from?

[khana]

Yes, the UK does borrow money and from its citizens normally in the form of Gilts and Treasury Stock which are effectively loans to the goverment with interest paid. These are usually staggered investments so that they do not all come due for payment or reimbursement at the same time. The interest rates payable also differ and are fixed so can be traded like stocks and shares.

[Carolina]

But what for?