Final answer:
The public debt of most industrialized nations is typically large, often due to insufficient revenue to cover public services and the economic influence of a nation's elite. Governments manage these debts by issuing bonds and maintaining payment abilities, and economic growth can result in a declining debt-to-GDP ratio despite running a deficit.
Step-by-step explanation:
The public debt of most industrialized nations is almost always large. This is due to various factors, including the need to borrow to fund public services when revenue is insufficient, regardless of individual wealth within the country. National debt becomes a significant issue when concentrated in the hands of a socioeconomic elite, who can influence politics and economic policies. While governments typically do not fully eliminate their debt, they maintain their borrowing ability and manage payments over time, as seen with Germany's repayment of World War One reparations. Public debt differs from private debt in that governments can issue bonds to manage and redistribute via taxes without a direct loss of purchasing power, aside from debt owed to foreign entities.
Rapid economic growth can lead to a reduction in the debt-to-GDP ratio even when a nation runs budget deficits, as experienced by the U.S. post-World War II. However, the ratio can increase in times of economic shrinkage, even if the nation has a budget surplus. Methods of government borrowing include selling Treasury bonds, notes, and bills, which can be utilized to address national debt or refunded to taxpayers.