Most of the U.S. national debt is owed to ____. Thus a rising national debt implies that there will be a future redistribution of income and wealth in favor of ____.

Question

Quizplus · Accepted Answer

The majority of the U.S. national debt is owed to bondholders, who are typically U.S. citizens or institutions. Therefore, a rising national debt implies a future redistribution of income and wealth in favor of these bondholders, who will receive interest payments on their investments. Option A is incorrect because only a small portion of the debt is owed to foreigners. Option C is incorrect because a rising debt does not necessarily imply a redistribution of income and wealth to those needing government services. Option D is also incorrect because a rising debt does not necessarily imply a redistribution of income and wealth to those needing government services, but rather to bondholders.