What does national debt really mean? and why is it bad to pay it off? I can't get my head around the concept.
This question didn't help much either.
Could you please explain what it really means? and why is it bad to pay it off and have zero national debt?
Thanks.
You borrow \$100 from John, at 3% interest per annum. You are indebted to John, to the tune of \$100.
The Wakanda government borrows \$100M from the public, at 3% interest per annum. The Wakanda government is indebted to the public, to the tune of \$100M.


Conceptually there is no difference between (1) and (2).

But in practice, (1) is more likely to be informal. Maybe the agreement between you and John is not even written down and is simply verbal. Or maybe it is casually scrawled on a scrap of paper.

Whereas (2) is more likely to be formal. Indeed, officially, governments don't call it "borrowing". Instead, they say that they "issue bonds". Anyone in the "public" (including Joe on the street or the Chinese government) is free to buy these bonds. If say the bonds are one-year bonds that pay 3% interest per annum, then the government promises to repay the bond-holders $103M in a year's time.




  why is it bad to pay it off and have zero national debt?


I don't think any economist believes it is "bad to pay it off and have zero national debt". Instead, as with most questions in economics, the answer is "It depends." You can have too much debt or too little debt. Having zero national debt is neither always ideal nor always bad.

But in practice (i.e. in the real world), many governments tend to err on the side of having too much debt.