Economists sometimes distinguish between “debtor” and “creditor” nations. The formers owe more to people in other countries than people in other countries owe to them, and for the latter, it is the opposite.

There are several reasons why a country could owe money. One of them is that other countries consider it a safe home for investment. Often, prosperous countries are the beneficiaries of investment from other countries in proportion to how reliable they seem. The funding creates more jobs within the debtor nation, more goods for the consumers in that country, and an income for foreign investors. From the view of the economy, this is a positive-sum interaction.

Nor is there anything intrinsically wrong with being a creditor nation. The way this balances out depends on the particular circumstances, opportunities, and constraints facing each country.

Neither international deficits nor surpluses are inevitable consequences of either prosperity or poverty. The labels used to tell us little about the condition of a country’s economy.