A debt is an obligation owed by one party (the debtor) to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.
A debt is created when a creditor agrees to lend a sum of assets to a debtor. Debt is usually granted with expected repayment; in modern society, in most cases, this includes repayment of the original sum, plus interest.
In finance, debt is a means of using anticipated future purchasing power in the present before it has actually been earned. Some companies and corporations use debt as a part of their overall corporate finance strategy.
Read more about Debt: Payment, Types of Debt, Debt Syndication, Letters of Credit, Accounting Debt, Inflation and Exchange Rates, Effects of Debt, Etymology, History of Debt, Criticisms, Levels and Flows
Famous quotes containing the word debt:
“The debt was the most sacred obligation incurred during the war. It was by no means the largest in amount. We do not haggle with those who lent us money. We should not with those who gave health and blood and life. If doors are opened to fraud, contrive to close them. But don’t deny the obligation, or scold at its performance.”
—Rutherford Birchard Hayes (1822–1893)
“Even the poor student studies and is taught only political economy, while that economy of living which is synonymous with philosophy is not even sincerely professed in our colleges. The consequence is, that while he is reading Adam Smith, Ricardo, and Say, he runs his father in debt irretrievably.”
—Henry David Thoreau (1817–1862)
“Capitalism is an art form, an Apollonian fabrication to rival nature. It is hypocritical for feminists and intellectuals to enjoy the pleasures and conveniences of capitalism while sneering at it.... Everyone born into capitalism has incurred a debt to it. Give Caesar his due.”
—Camille Paglia (b. 1947)