Comment by misiti3780
2 days ago
We are 35 trillion dollars in debt - we are broke. We have go cut costs if we want to avoid catastrophe in the medium term.
2 days ago
We are 35 trillion dollars in debt - we are broke. We have go cut costs if we want to avoid catastrophe in the medium term.
Government debt is a result of government spending into the real economy. It is where we get the taxpayer dollars that we spend, some of which go back to the government itself. A government without debt is also an economy without money.
Governments with central banks can mismanage their currency, but they can't run out of it.
They won't run out of currency, but the people that use it will run out of faith.
> They won't run out of currency, but the people that use it will run out of faith.
Which is what happens when bond yields go so high that governments default. To my limited understanding, US Treasury bonds are used to determine the 'risk-free rate' of return because the US government reliably pays its bills.
When? At what specific (magic) number does everything come crumbling down? We're at ~36 Trillion today, would 37 Trillion the number that will cause people to run out of faith? I mean that's only one more than we have today, surely people won't run out of faith for one more. So maybe it's 40 Trillion? But come on, we're at 36, people can't possibly give up on the US dollar just an 8% increase. How about 100 Trillion? 500 Trillion? I'm not sure you know how this game is played.
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There's a body of government explicitly built to do exactly that and given exactly that power in the constitution. It's called Congress.
The Executive can also do this.
If we are broke then why do people buy our debt? It's obviously more complex than you make it sound.
because for now there’s a reasonable chance it will get paid off. what happens when the house of cards comes down?
What happens when any house of cards comes down? Could be said about any system anywhere on Earth. Could be said even if the US had zero debt.
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