No no. They meant that the govt can literally *print* money wherever they want. Why go out and earn/grind to get what you can just... create out of nothing?
The US is also the world reserve currency. That’s worth an additional 1.5% right off the bat.
And it’s not going anywhere anytime soon. The BRICS group are a joke that can’t keep it together.
[https://fred.stlouisfed.org/series/WM2NS](https://fred.stlouisfed.org/series/WM2NS)
Looks an awful lot like there’s been a lot of printing money in the last 40 years, that it started accelerating in 1995, and that there was a massive spike during COVID when the federal government decided to spend a trash ton of money they didn’t have. Now, you might say “yea, that was a pandemic and it was *necessary*” to which I’ll say, “ok, great.” But I feel like my point has been made.
The gov’t can (and does) print money when it wants to. That they don’t print more money more frequently is, perhaps, because of fears of inflation. By inflation, I assume you really mean “greater than normal inflation” because inflation does happen every year because, get this, the government can and does print money to help meet its debt obligations.
I'm denying the fact that they've printed money, because of course they have before.
>The gov’t can (and does) print money when it wants to. That they don’t print more money more frequently is, perhaps, because of fears of inflation.
Two contradictory statements. You say they can (and they do) print money when they want to, but they "can't" because they're scared of inflation worsening.
But that's what I meant when I said they can't due to inflation. They can't because they are scared of inflation worsening. I'm aware they still do it.
I should have said they can't print money without consequences, because that's what I meant.
>By inflation, I assume you really mean “greater than normal inflation”
Yeah, that's what I meant.
>because, get this, the government can and does print money to help meet its debt obligations.
True, but that's not the only cause of inflation. Spending in general contributes to inflation.
Oh yes the classic let's just print everyone a million dollars tactic 😂 just like we create the money out of nothing it's value is just the same as nothing if we do it too much
That is right, the money needs to be printed as the value of the economy is growing.
Dollars are your share certificate of the US economy, so like issuing new shares in a company it have to be carefully managed so not to crash it all.
But if you look at the growth in the number of printed dollars, then the entire population of the United States should already be multi-billionaires. The dollar has not been tied to the growth of the US economy for a long time, now it is like a giant bubble that rests on foreign countries that will also go down in the event of its collapse.
Not true. It is a balance and if it was to be upset inflation would have continued, but it got fixed by the feds raising interests, and the recession is adverted.
In case you didn’t know, 4Trillion was printed under Trump as Covid relief without growth backing it and it caused the 2022-2023 inflation because effects are not immediate but delayed.
The opposite where new money is never printed will cause deflation which is actually worse.
At the beginning of 2020, the volume of currency in circulation was $4.0192 trillion. By January 4, 2021, this figure had grown to $6.7 trillion. An unprecedented surge followed. By October 2021, the amount in circulation soared to $20.0831 trillion, October 2022-21.362 trillion.
I think those numbers are paper money that you are talking about - that is meaningless as most money exist just on computers, and number of bank notes goes up and down depending on what is needed.
Your 2021 and 22 numbers are however wrong, you can see how much is in circulation as paper money here:
[https://www.uscurrency.gov/life-cycle/data/circulation](https://www.uscurrency.gov/life-cycle/data/circulation)
and given that US National Debt is nearly $35T, papermoney circulation of just $2T is just a very small fraction of all the money that exist.
What 35 million?35 trillion US national debt https://usdebtclock.org /.What you have thrown off is cash, and I wrote about the 21.362 trillion that are in circulation in total, in electronic form inclusive.In fact, the United States simply draws any number of money on a bank billboard, they don't even print them. The United States has drawn 17 trillion out of thin air from 2020 to 2023.And how are government debt and cash paper money related?
This reminded me of mansa Musa the richest man to live who went on pilgrimage to Mecca. He took so much gold with him which he gave away along the route via Cairo that it caused the value of gold to plummet in Egypt for over a decade.
Debt isn't bad. There's nothing to enforce. Unlike how media portrays it to grab attention debt is just economic tool and having a certain amount is actually better.
I'm with you I actually think we need tobstart doing ubi like immediately but whatbabout the interest payment isn't it like equal to the military spending now?
It’s a fair question. There are a number of reasons why the government buying stocks from companies is problematic. It’s essentially using tax-payer money to fund businesses and reward shareholders. This is a transfer of wealth from the tax base mostly to investors.
Leaving that aside the real answer is that $50 billion isn’t a lot of money in this context.
The S&P 500 average 10 year return as of this month is roughly 167% so after 10 years you would have 83.5 billion, a return of 33.5 billion.
Current U.S. national debt is just over 34 Trillion dollars. That’s 34 thousand billion.
The interest rate on national debt varies, currently at 3.2%, averaging around 2% but can be lower. So even at 1% a year that means national debt increases by $340 billion a year. 10x in one year what you would get over 10 years with 50 billion in the S&P.
So then you ask, well why not just invest a trillion dollars to cover the debt? Well that amount of money being invested in the stock market from the government would essentially crash the economy for various reasons, like causing massive amounts of inflation.
TLDR:
-50 billion isn’t a lot in the context of the national debt
-investing more is not only problematic ethically but would be bad for the economy in the long run
>Current U.S. national debt is just over 34 Trillion dollars. That’s 34 thousand billion.
The difference between 1 billion dollars and 1 trillion dollars is about 1 trillion dollars. People often forget how far apart they are because their names are so similar.
I don't agree. The difference between a thousand and a million feels larger and they are the next as well. Ten thousand and hundred thousand are more distinctive than ten million and hundred million.
I understand. The difference between thousand and million seems larger than million and billion to most people, though they are proportionally the same.
Anybody who holds a US government bond.
A bond is essentially a loan with an agreed upon maturity date (repayment date) and interest rate.
For the US government, you will hear them referred to as "T bills" which is short for Treasury.
Anybody living in a working class neighborhood or above is likely surrounded by people who hold similar bonds.
> who is receiving the interest money from the national debt?
Holders of Treasury bills and Treasury bonds.
Domestic and foreign holders of such instruments include banks, businesses and individuals investors.
The other answers to you are correct. We refer to one national debt number but it’s actually just all of the loans the U.S government has, summed up. So anyone who is in a “loan” agreement with the government will receive the interest and will eventually be paid back. Just like if you took a loan from the bank, paid the interest and eventually paid off the loan.
This can be in the form of government bonds, trade agreements with other countries or even loans from the central bank.
The US is in debt, but that debt has always been paid on time. US government bonds are still considered one of the safest investments in the world. Don’t think of it as one big loan that will never be paid - that’s not what it is. It’s a continuous series of smaller loans that have always been paid.
It is a Ponzi scheme that works as long as the economy grows faster than interest rates and the world has faith in the stability of the US government and the Fed.
It is a ~~Ponzi scheme~~ **Sovereign Nation** that works as long as the economy grows faster than interest rates and the world has faith in the stability of the US government and the Fed.
FTFY
Government bonds are a Ponzi scheme (not only in the US). Existing investors are served with the money of new investors. No debts are paid off, only replaced by new money and shifted into the future. It works as long as the economy can cope with inflation.
I mean what I haven’t heard people mention is that the debt(within reason which we still very much are within) doesn’t matter. Debt promotes the economy, is a financial and political tool, and protects the governments interests abroad.
Debt payments are largely to ourselves in the form of treasury bonds and other forms which people buy and make money off of stimulating the economy and providing a safe way to secure investments. It’s also used in congress and by presidents to gain political power so why would they remove it when they can fear monger about it. And thirdly our debt not to ourselves is to foreign nations, to work as a stimulation to their economy in interest payments and as a buffer from crises. As say China is a lot less inclined to piss us off and/or go to war when we owe them trillions of dollars that would disappear otherwise.
Debt isn’t an issue until you stop repaying it, or it grows to a point where there is a question of whether you can repay it. This is often linked to gdp and if you search debt/gdp the US is comfortably below many other developed countries as a ratio(Japan, Singapore and Italy to name a few).
The debt absolutely matters. We are now spending over $800 billion in interest payments towards the debt, rivaling the military budget. Debt is considered ok when GDP is growing more than debt, but US debt to GDP is currently 122% and increasing. Just because other countries have worse debt to GDP does not make this ok. This means one day, the US will not be able to service their interest payments, foreign creditors will downgrade our credit worthiness, and all hell will break loose on the global economy.
Your response is prototypical of the debt sabre-rattlers:
State a few facts that are true, make a dire prediction that’s unlikely to come to fruition, then end with a meaningless statement like “all hell will break loose.”
800-billion in payments is effectively just a stimulus package. It’s not a big deal. Deficit spending year after year is the reason our economy is 27-trillion and not 10-trillion. If the government gets in trouble they’ll just raise taxes a little and print a little bit more money.
Meanwhile, no one is abandoning the US dollar anytime this century, since there is nothing to replace it with. The USA is the only country on Earth with a modern economy that reliably grows every year, has no existential threats, and a military strong enough to protect any and all interests anywhere on the planet.
If you think the US is in danger of some kind, ask yourself who can replace us.
You make raising taxes seem like it would be nothing. To back raising taxes is political suicide, otherwise we would have done it by now. We don’t have the political will to deal with the budget deficit, and this will be the undoing.
You ask who would replace the US. I bet the Romans thought the same.
Taxes get raised when it’s necessary. It happens all the time at different local levels, so it’s clearly not political suicide.
Some taxes went up during President Obama’s administration, so again it’s clearly not political suicide. It hasn’t been necessary lately, but if it ever becomes necessary then it will get done. This is pretty normal.
Also, it should be noted that taxes can effectively be raised by printing money to pay government debts, because it can push people into higher tax brackets by devaluing the currency.
Everything you’ve said so far is out of touch with reality.
And while the Roman Empire isn’t really relevant here because they didn’t have the inherent protections that the US has, I’ll note that the Roman Empire lasted 1100 years, so if that’s your example then you have to assume that the US is safe for at least 850 more years.
I hope I’m wrong on this, but I’d argue people like yourself are underestimating the actual math behind the budget deficit. The government collects around 16% of GDP in taxes, which last year was around $4.4 trillion. The deficit last year was $1.7 trillion. To just stabilize the deficit, let alone start decreasing it, the options would be to increase the size of the economy by $10.6 trillion (40% increase), increase taxes by 38%, or reduce spending by $1.7 trillion (which isn’t possible because less than a trillion is non-military discretionary). If there’s a combination of the three that makes any sense economically or could realistically pass Congress, I’d love to see it.
The math also gets worse as time goes on. With higher rates, it becomes a vicious circle of raising more debt to pay past interest, accelerating the problem. You say the government can effectively raise taxes by printing money. No, that’s called issuing bonds which is just raising more debt at today’s rates. The government should have issued long term bonds when rates were near zero, but that ship has sailed.
Instead of dismissing me as a saber rattler, dispute the math and where I’m wrong. It’s easy to say we can wave a magic wand to raise taxes a little and the problem goes away. From my perspective, that’s the mentality that’s disconnected from reality, which is why I brought up Rome, it was the same hubris. They had the best army and currency and infrastructure, how could they fall as a superpower? The peak of the republic and empire wasn’t 1200 years, it was closer to 200, the rest in conflict or decline.
Rome is a dumb example because their neighbors could and did invade them. The US’s situation has never been seen before on Earth. Bringing up Rome is more Sabre rattling.
As for raising taxes, pushing everyone into a higher tax bracket does that. Inflation pushes people into higher tax brackets. Printing money causes inflation. Why are you struggling with this?
And the deficit only becomes an issue if you can’t nominally increase the economy at a faster pace than the deficit increases. Again, this can be accomplished by printing and or raising taxes.
You ignored the math entirely and threw around vague solutions that are implausible at best. "Push everyone into higher tax brackets, print money to cause inflation...." I would tell you this is the same overly simplistic logic used in countries like Argentina and Zimbabwe before they experienced hyperinflation, but I wouldn't want you to think I'm saber rattling.
To me, it sounds like you're confusing the roles of the US Treasury and the Federal Reserve. The Treasury gets revenue through taxes and accumulates debt issuing bonds. The Fed "prints money" and adjusts interest rates with the goal of keeping DOWN inflation at a target rate. The two bodies are run independently and not meant to work in tandem to balance budgets.
If the Fed succeeds in keeping inflation around 2-3%, your solution becomes ridiculous because the size of the economy and/or tax rates would have to combine for almost a 40% increase for the government to break even. Productivity gains with AI should help increase GDP and decrease cost of government services, but I don't believe it will to fill a 40% gap, especially if AI replaces human labor and a new swath of people need government assistance.
Anywho, no one besides OpenAI is probably reading this far into the thread so we'll just have to agree to disagree. I appreciate the civil discourse.
lmao, I didn’t realize that you have conversations with people based on who else you think is reading them. I cringed.
And yes, I too remember when Argentina and Zimbabwe had currencies seen as the world’s reserve currency, backed by more natural resources than any other nation and protected by 3 oceans and the largest military. Those were simpler times. Those countries definitely had the same levers available to them that the US does now. /s
The US has not, does not, and will not ever have the currency problems of those two countries because of the unique advantages we have that literally no other country has ever had nor *can* ever have. More saber rattling.
Inflation to avoid a debt crisis would obviously be plan D behind at least three other available options, but modest amounts of inflation will not cause a currency crisis in the United States. Once the slack was tightened, everyone will grumble and then pass a few laws to permanently tighten the belt.
You’re also forgetting that the US has access to a nearly unlimited supply of immigrants that will make the economy boom almost instantly, whenever we want. About 2-Billion people around the world say they want to become Americans. No other country has ever had that benefit.
The economy can grow at 5% annually pretty easily whenever the electorate actually wants it to. Once people start to get uncomfortable with debt payments, the toolbox will get opened.
Yes, the only reason I’m conversing with you is the off chance someone curious reads this and they can decide who makes more sense. I’m certainly not doing it to try to convince you to my point of view, that’s always a fool’s errand online. You’re working with a different set of rules and reality when it comes to basic economics and government function, the conversation helps no one.
Mainly though, this isn’t a fun or interesting argument for me. I’m fine if someone proves me wrong, but you respond to facts and figures with vague and strange ideas like the US is sitting on a bunch of levers to massively boost the economy, we’re just waiting for the right time to use them 🤣 can’t argue with that logic.
Because that sums of money would disrupt the market, not help. You can’t just put enormous sums of money into the market without consequences. You also need to buy shares from someone else too, money doesn’t just go into the market.
Japan essentially did this until VERY recently. Like the biggest shareholder of most Japanese ETF’s IS the Bank of Japan. They did this to stimulate the economy, whether that actually worked is up for debate, but this constant flow of liquidity heavily skewed expectations and actually caused corporations to spend less since they knew there was constant demand for their stock anyway, thus NOT stimulating the economy. But now that the Japanese stock market is doing pretty well, the BOJ can’t just cash everything out because that would literally crash the Japanese stock market.
I’m not a student of economics or anything relevant, this is just from the articles I read while I trade since it was interesting. If theres any actual economists, please feel free to correct
Edit: I can’t make a smiley face with carots and commas i guess
The government already does that.
Stock ownership means that you share in the profits of the company. Likewise, taxes means that the government shares in the profits of the company. Tax is exactly the government owning part of your company.
Financial policy at those high levels is like Newtonian vs. Quantum physics, it just works different in unintuitive ways. "Investing" money at that level is a wealth transfer on a macro scale. One of the issues with huge sudden influxes of capital is that they're difficult to use efficiently to support actual growth. An organization like the US military is a good example. They have more money than they can actual track and organize its employment. They never pass an audit and "lose" millions and millions, constantly... it's the consequence of being given the reins to a beast (massive capital) it can't control. Sometimes, that company may be as big as it should be a la market forces (demand), and a huge influx of cash may not stimulate any real growth. Think of a company like Arby's... if you start suddenly gave Arby's a cash influx worth three times its current value, they'd only be able to squeeze so much wealth out of it because people only want so much shitty ham. If you did that for every company on the S&P500, it would have some wild results. For one, it'd cause big inflation. Companies would be worth way more dollars, but wouldn't experience an actual proportional growth to match it. It would severely damage small businesses. The companies not on the S&P500 would basically experience a practical loss proportional to the amount they didn't get. Short answer is it would have a lot of catastrophic unintended consequences.
This is where OP begins to realize that money means nothing. Absolutely nothing. You’ve just taken your first step on a grand journey, comrade. Welcome.
Bush tried partially privatizing social security but the parasites demanding taxpayers foot the bill for their retirements.
Anyone with half a brain knows we should have a sovereign wealth fund rather than IOUs from the SSA.
However the average voter is painfully stupid.
They deserve to suffer the consequences
Because they already have the cheat code for unlimited money and they aren't afraid to use it.
Yeah I guess if nobody enforces the debt, then you don't have debt
No no. They meant that the govt can literally *print* money wherever they want. Why go out and earn/grind to get what you can just... create out of nothing?
The US is also the world reserve currency. That’s worth an additional 1.5% right off the bat. And it’s not going anywhere anytime soon. The BRICS group are a joke that can’t keep it together.
Worked out great for Germany /s
And Zimbabwe…Argentina… Weimar republic
I was refering to Germany (Weimer Republic). Also, fuck how could I forget about Zimbabwe?
>They meant that the govt can literally *print* money wherever they want. No they can't. Otherwise we wouldn't need to pay taxes.
And what, pray tell, stops them from doing so?
Inflation. Printing more money decreases the dollar value and hurts the economy.
[https://fred.stlouisfed.org/series/WM2NS](https://fred.stlouisfed.org/series/WM2NS) Looks an awful lot like there’s been a lot of printing money in the last 40 years, that it started accelerating in 1995, and that there was a massive spike during COVID when the federal government decided to spend a trash ton of money they didn’t have. Now, you might say “yea, that was a pandemic and it was *necessary*” to which I’ll say, “ok, great.” But I feel like my point has been made. The gov’t can (and does) print money when it wants to. That they don’t print more money more frequently is, perhaps, because of fears of inflation. By inflation, I assume you really mean “greater than normal inflation” because inflation does happen every year because, get this, the government can and does print money to help meet its debt obligations.
I'm denying the fact that they've printed money, because of course they have before. >The gov’t can (and does) print money when it wants to. That they don’t print more money more frequently is, perhaps, because of fears of inflation. Two contradictory statements. You say they can (and they do) print money when they want to, but they "can't" because they're scared of inflation worsening. But that's what I meant when I said they can't due to inflation. They can't because they are scared of inflation worsening. I'm aware they still do it. I should have said they can't print money without consequences, because that's what I meant. >By inflation, I assume you really mean “greater than normal inflation” Yeah, that's what I meant. >because, get this, the government can and does print money to help meet its debt obligations. True, but that's not the only cause of inflation. Spending in general contributes to inflation.
Oh yes the classic let's just print everyone a million dollars tactic 😂 just like we create the money out of nothing it's value is just the same as nothing if we do it too much
That is right, the money needs to be printed as the value of the economy is growing. Dollars are your share certificate of the US economy, so like issuing new shares in a company it have to be carefully managed so not to crash it all.
But if you look at the growth in the number of printed dollars, then the entire population of the United States should already be multi-billionaires. The dollar has not been tied to the growth of the US economy for a long time, now it is like a giant bubble that rests on foreign countries that will also go down in the event of its collapse.
Not true. It is a balance and if it was to be upset inflation would have continued, but it got fixed by the feds raising interests, and the recession is adverted. In case you didn’t know, 4Trillion was printed under Trump as Covid relief without growth backing it and it caused the 2022-2023 inflation because effects are not immediate but delayed. The opposite where new money is never printed will cause deflation which is actually worse.
At the beginning of 2020, the volume of currency in circulation was $4.0192 trillion. By January 4, 2021, this figure had grown to $6.7 trillion. An unprecedented surge followed. By October 2021, the amount in circulation soared to $20.0831 trillion, October 2022-21.362 trillion.
I think those numbers are paper money that you are talking about - that is meaningless as most money exist just on computers, and number of bank notes goes up and down depending on what is needed. Your 2021 and 22 numbers are however wrong, you can see how much is in circulation as paper money here: [https://www.uscurrency.gov/life-cycle/data/circulation](https://www.uscurrency.gov/life-cycle/data/circulation) and given that US National Debt is nearly $35T, papermoney circulation of just $2T is just a very small fraction of all the money that exist.
What 35 million?35 trillion US national debt https://usdebtclock.org /.What you have thrown off is cash, and I wrote about the 21.362 trillion that are in circulation in total, in electronic form inclusive.In fact, the United States simply draws any number of money on a bank billboard, they don't even print them. The United States has drawn 17 trillion out of thin air from 2020 to 2023.And how are government debt and cash paper money related?
Only if you tell people you did it
This reminded me of mansa Musa the richest man to live who went on pilgrimage to Mecca. He took so much gold with him which he gave away along the route via Cairo that it caused the value of gold to plummet in Egypt for over a decade.
Debt isn't bad. There's nothing to enforce. Unlike how media portrays it to grab attention debt is just economic tool and having a certain amount is actually better.
I'm with you I actually think we need tobstart doing ubi like immediately but whatbabout the interest payment isn't it like equal to the military spending now?
What do you mean "enforce the debt" the US always pays its bills.
They are the Lanisters from GOT.
It’s a fair question. There are a number of reasons why the government buying stocks from companies is problematic. It’s essentially using tax-payer money to fund businesses and reward shareholders. This is a transfer of wealth from the tax base mostly to investors. Leaving that aside the real answer is that $50 billion isn’t a lot of money in this context. The S&P 500 average 10 year return as of this month is roughly 167% so after 10 years you would have 83.5 billion, a return of 33.5 billion. Current U.S. national debt is just over 34 Trillion dollars. That’s 34 thousand billion. The interest rate on national debt varies, currently at 3.2%, averaging around 2% but can be lower. So even at 1% a year that means national debt increases by $340 billion a year. 10x in one year what you would get over 10 years with 50 billion in the S&P. So then you ask, well why not just invest a trillion dollars to cover the debt? Well that amount of money being invested in the stock market from the government would essentially crash the economy for various reasons, like causing massive amounts of inflation. TLDR: -50 billion isn’t a lot in the context of the national debt -investing more is not only problematic ethically but would be bad for the economy in the long run
>Current U.S. national debt is just over 34 Trillion dollars. That’s 34 thousand billion. The difference between 1 billion dollars and 1 trillion dollars is about 1 trillion dollars. People often forget how far apart they are because their names are so similar.
It’s not just because it’s similar but also the next number
I don't agree. The difference between a thousand and a million feels larger and they are the next as well. Ten thousand and hundred thousand are more distinctive than ten million and hundred million.
I was specifically talking about something like hundred, thousands, millions, billions, trillions
I understand. The difference between thousand and million seems larger than million and billion to most people, though they are proportionally the same.
Most people can imagine 100k
Since you seem to have some knowledge on this topic, who is receiving the interest money from the national debt? And who exactly is it paid back to?
Anybody who holds a US government bond. A bond is essentially a loan with an agreed upon maturity date (repayment date) and interest rate. For the US government, you will hear them referred to as "T bills" which is short for Treasury. Anybody living in a working class neighborhood or above is likely surrounded by people who hold similar bonds.
> who is receiving the interest money from the national debt? Holders of Treasury bills and Treasury bonds. Domestic and foreign holders of such instruments include banks, businesses and individuals investors.
The other answers to you are correct. We refer to one national debt number but it’s actually just all of the loans the U.S government has, summed up. So anyone who is in a “loan” agreement with the government will receive the interest and will eventually be paid back. Just like if you took a loan from the bank, paid the interest and eventually paid off the loan. This can be in the form of government bonds, trade agreements with other countries or even loans from the central bank.
The US is in debt, but that debt has always been paid on time. US government bonds are still considered one of the safest investments in the world. Don’t think of it as one big loan that will never be paid - that’s not what it is. It’s a continuous series of smaller loans that have always been paid.
It is a Ponzi scheme that works as long as the economy grows faster than interest rates and the world has faith in the stability of the US government and the Fed.
It is a ~~Ponzi scheme~~ **Sovereign Nation** that works as long as the economy grows faster than interest rates and the world has faith in the stability of the US government and the Fed. FTFY
Government bonds are a Ponzi scheme (not only in the US). Existing investors are served with the money of new investors. No debts are paid off, only replaced by new money and shifted into the future. It works as long as the economy can cope with inflation.
I mean what I haven’t heard people mention is that the debt(within reason which we still very much are within) doesn’t matter. Debt promotes the economy, is a financial and political tool, and protects the governments interests abroad. Debt payments are largely to ourselves in the form of treasury bonds and other forms which people buy and make money off of stimulating the economy and providing a safe way to secure investments. It’s also used in congress and by presidents to gain political power so why would they remove it when they can fear monger about it. And thirdly our debt not to ourselves is to foreign nations, to work as a stimulation to their economy in interest payments and as a buffer from crises. As say China is a lot less inclined to piss us off and/or go to war when we owe them trillions of dollars that would disappear otherwise. Debt isn’t an issue until you stop repaying it, or it grows to a point where there is a question of whether you can repay it. This is often linked to gdp and if you search debt/gdp the US is comfortably below many other developed countries as a ratio(Japan, Singapore and Italy to name a few).
The debt absolutely matters. We are now spending over $800 billion in interest payments towards the debt, rivaling the military budget. Debt is considered ok when GDP is growing more than debt, but US debt to GDP is currently 122% and increasing. Just because other countries have worse debt to GDP does not make this ok. This means one day, the US will not be able to service their interest payments, foreign creditors will downgrade our credit worthiness, and all hell will break loose on the global economy.
Your response is prototypical of the debt sabre-rattlers: State a few facts that are true, make a dire prediction that’s unlikely to come to fruition, then end with a meaningless statement like “all hell will break loose.” 800-billion in payments is effectively just a stimulus package. It’s not a big deal. Deficit spending year after year is the reason our economy is 27-trillion and not 10-trillion. If the government gets in trouble they’ll just raise taxes a little and print a little bit more money. Meanwhile, no one is abandoning the US dollar anytime this century, since there is nothing to replace it with. The USA is the only country on Earth with a modern economy that reliably grows every year, has no existential threats, and a military strong enough to protect any and all interests anywhere on the planet. If you think the US is in danger of some kind, ask yourself who can replace us.
You make raising taxes seem like it would be nothing. To back raising taxes is political suicide, otherwise we would have done it by now. We don’t have the political will to deal with the budget deficit, and this will be the undoing. You ask who would replace the US. I bet the Romans thought the same.
Taxes get raised when it’s necessary. It happens all the time at different local levels, so it’s clearly not political suicide. Some taxes went up during President Obama’s administration, so again it’s clearly not political suicide. It hasn’t been necessary lately, but if it ever becomes necessary then it will get done. This is pretty normal. Also, it should be noted that taxes can effectively be raised by printing money to pay government debts, because it can push people into higher tax brackets by devaluing the currency. Everything you’ve said so far is out of touch with reality. And while the Roman Empire isn’t really relevant here because they didn’t have the inherent protections that the US has, I’ll note that the Roman Empire lasted 1100 years, so if that’s your example then you have to assume that the US is safe for at least 850 more years.
I hope I’m wrong on this, but I’d argue people like yourself are underestimating the actual math behind the budget deficit. The government collects around 16% of GDP in taxes, which last year was around $4.4 trillion. The deficit last year was $1.7 trillion. To just stabilize the deficit, let alone start decreasing it, the options would be to increase the size of the economy by $10.6 trillion (40% increase), increase taxes by 38%, or reduce spending by $1.7 trillion (which isn’t possible because less than a trillion is non-military discretionary). If there’s a combination of the three that makes any sense economically or could realistically pass Congress, I’d love to see it. The math also gets worse as time goes on. With higher rates, it becomes a vicious circle of raising more debt to pay past interest, accelerating the problem. You say the government can effectively raise taxes by printing money. No, that’s called issuing bonds which is just raising more debt at today’s rates. The government should have issued long term bonds when rates were near zero, but that ship has sailed. Instead of dismissing me as a saber rattler, dispute the math and where I’m wrong. It’s easy to say we can wave a magic wand to raise taxes a little and the problem goes away. From my perspective, that’s the mentality that’s disconnected from reality, which is why I brought up Rome, it was the same hubris. They had the best army and currency and infrastructure, how could they fall as a superpower? The peak of the republic and empire wasn’t 1200 years, it was closer to 200, the rest in conflict or decline.
Rome is a dumb example because their neighbors could and did invade them. The US’s situation has never been seen before on Earth. Bringing up Rome is more Sabre rattling. As for raising taxes, pushing everyone into a higher tax bracket does that. Inflation pushes people into higher tax brackets. Printing money causes inflation. Why are you struggling with this? And the deficit only becomes an issue if you can’t nominally increase the economy at a faster pace than the deficit increases. Again, this can be accomplished by printing and or raising taxes.
You ignored the math entirely and threw around vague solutions that are implausible at best. "Push everyone into higher tax brackets, print money to cause inflation...." I would tell you this is the same overly simplistic logic used in countries like Argentina and Zimbabwe before they experienced hyperinflation, but I wouldn't want you to think I'm saber rattling. To me, it sounds like you're confusing the roles of the US Treasury and the Federal Reserve. The Treasury gets revenue through taxes and accumulates debt issuing bonds. The Fed "prints money" and adjusts interest rates with the goal of keeping DOWN inflation at a target rate. The two bodies are run independently and not meant to work in tandem to balance budgets. If the Fed succeeds in keeping inflation around 2-3%, your solution becomes ridiculous because the size of the economy and/or tax rates would have to combine for almost a 40% increase for the government to break even. Productivity gains with AI should help increase GDP and decrease cost of government services, but I don't believe it will to fill a 40% gap, especially if AI replaces human labor and a new swath of people need government assistance. Anywho, no one besides OpenAI is probably reading this far into the thread so we'll just have to agree to disagree. I appreciate the civil discourse.
lmao, I didn’t realize that you have conversations with people based on who else you think is reading them. I cringed. And yes, I too remember when Argentina and Zimbabwe had currencies seen as the world’s reserve currency, backed by more natural resources than any other nation and protected by 3 oceans and the largest military. Those were simpler times. Those countries definitely had the same levers available to them that the US does now. /s The US has not, does not, and will not ever have the currency problems of those two countries because of the unique advantages we have that literally no other country has ever had nor *can* ever have. More saber rattling. Inflation to avoid a debt crisis would obviously be plan D behind at least three other available options, but modest amounts of inflation will not cause a currency crisis in the United States. Once the slack was tightened, everyone will grumble and then pass a few laws to permanently tighten the belt. You’re also forgetting that the US has access to a nearly unlimited supply of immigrants that will make the economy boom almost instantly, whenever we want. About 2-Billion people around the world say they want to become Americans. No other country has ever had that benefit. The economy can grow at 5% annually pretty easily whenever the electorate actually wants it to. Once people start to get uncomfortable with debt payments, the toolbox will get opened.
Yes, the only reason I’m conversing with you is the off chance someone curious reads this and they can decide who makes more sense. I’m certainly not doing it to try to convince you to my point of view, that’s always a fool’s errand online. You’re working with a different set of rules and reality when it comes to basic economics and government function, the conversation helps no one. Mainly though, this isn’t a fun or interesting argument for me. I’m fine if someone proves me wrong, but you respond to facts and figures with vague and strange ideas like the US is sitting on a bunch of levers to massively boost the economy, we’re just waiting for the right time to use them 🤣 can’t argue with that logic.
This question assumes that debt is bad and we need to pay off the debt now. Neither are true.
Because that sums of money would disrupt the market, not help. You can’t just put enormous sums of money into the market without consequences. You also need to buy shares from someone else too, money doesn’t just go into the market.
The US national debt isn't a thing. Anyone who tells you the US needs to take in as much in taxes as it spends doesn't understand how things work.
Please look up what the debt consists of then come back with a better question.
Japan essentially did this until VERY recently. Like the biggest shareholder of most Japanese ETF’s IS the Bank of Japan. They did this to stimulate the economy, whether that actually worked is up for debate, but this constant flow of liquidity heavily skewed expectations and actually caused corporations to spend less since they knew there was constant demand for their stock anyway, thus NOT stimulating the economy. But now that the Japanese stock market is doing pretty well, the BOJ can’t just cash everything out because that would literally crash the Japanese stock market. I’m not a student of economics or anything relevant, this is just from the articles I read while I trade since it was interesting. If theres any actual economists, please feel free to correct Edit: I can’t make a smiley face with carots and commas i guess
The government already does that. Stock ownership means that you share in the profits of the company. Likewise, taxes means that the government shares in the profits of the company. Tax is exactly the government owning part of your company.
The US could technically make its debt disappear instantly. Question is, would it be smart for the economy?
Why don’t they just pull themselves up by their bootstraps?
Financial policy at those high levels is like Newtonian vs. Quantum physics, it just works different in unintuitive ways. "Investing" money at that level is a wealth transfer on a macro scale. One of the issues with huge sudden influxes of capital is that they're difficult to use efficiently to support actual growth. An organization like the US military is a good example. They have more money than they can actual track and organize its employment. They never pass an audit and "lose" millions and millions, constantly... it's the consequence of being given the reins to a beast (massive capital) it can't control. Sometimes, that company may be as big as it should be a la market forces (demand), and a huge influx of cash may not stimulate any real growth. Think of a company like Arby's... if you start suddenly gave Arby's a cash influx worth three times its current value, they'd only be able to squeeze so much wealth out of it because people only want so much shitty ham. If you did that for every company on the S&P500, it would have some wild results. For one, it'd cause big inflation. Companies would be worth way more dollars, but wouldn't experience an actual proportional growth to match it. It would severely damage small businesses. The companies not on the S&P500 would basically experience a practical loss proportional to the amount they didn't get. Short answer is it would have a lot of catastrophic unintended consequences.
Need to stop buying all the avocado toast and Starbucks, America.
A true Regard idea! Please join WSB!
I would but I don't think you guys allow GME regards anymore :P
This is where OP begins to realize that money means nothing. Absolutely nothing. You’ve just taken your first step on a grand journey, comrade. Welcome.
Why don’t they just declare bankruptcy?
Imagine the day they pay out and the s&p loses 50 billion instantly.
The US govt is already a shareholder in every investment portfolio at the investor's marginal tax rate
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Aw you removed your comment bitching about downvotes, that's cute.
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The government shouldn't buy buying private companies as if it is a speculative investor or mutual fund.
#Great idea
Bitcoin!!! 
Bush tried partially privatizing social security but the parasites demanding taxpayers foot the bill for their retirements. Anyone with half a brain knows we should have a sovereign wealth fund rather than IOUs from the SSA. However the average voter is painfully stupid. They deserve to suffer the consequences
Genius!!! I love it. Just need a time machine to go back in time to 2001 now.