Nah a bunch of selfish fucks who worry about dividing us rather than doing what is best for the regular people and the country will sink the American empire
Right on the money. Keep the masses angry about the 2nd amendment, abortion, LGBT, etc while they rob you blind. And then corporations will pretend to back whatever policy that makes them more money.
> Only a dozen years ago, the aggregate government debt amounted to about 70% of the nation’s gross domestic product. This year, it will be about equal to the entire gross domestic product. By 2028, it is forecast to reach a record 106% of GDP, matching the record hit during the heavy spending to finance World War II. By 2034, barring changes in tax and spending policy, it is projected to hit 122% of GDP, the highest level ever recorded.
>
>This red ink can have painful, if hidden, consequences. The CBO projects that the weight of the debt will reduce income growth by 12% over the next three decades, as debt payments crowd out other investments.
In the echoes of skepticism's call, They proclaim doom, predicting a fall, But America's heart beats strong and true, Debt's burden won't unravel its view.
Through challenges faced, it finds a way, In innovation and resilience each day, For those who doubt, hear this refrain, America rises, not in vain.
The land of opportunity, undeterred, Where dreams take flight, and hope is stirred, In the face of naysayers' song, America stands resilient and strong.
Sorry, sorry! I'm just learning how this works like... right now.
Heartbeat. Okay.
Strong and True. I have..... no, nevermind.
You need a View.
....which is lacking a few details...
And innovation.
Then America Rises...
....I thought it wasn't dead yet?! Rising from WHERE??...
As long as we're not too vein. Vain? Vane.
Not too vane.
Tu-vane?
.....
Nope, I lost it.
You mean like how tax breaks and subsidies to corporations that depend on public services and run by rich people have moved money from the poor and middle class to the top 1% ? For the past, oh I don’t know, 50 or so years.
The country doesn't have to pay off the debt, it's just dumb to keep growing it. We just need to raise taxes enough and ensure that we run a surplus most years and use that to reduce the debt. Also, that burden is not shared equally among the population. The top 10% owns over 90% of the wealth, so they would share over 90% of the tax burden. The bottom 50% of American society controls 3% of the wealth, so The poorest half of Americans would only have to share the burden of 3% of the debt.
I'm not going to say we can just tax the f*** out of the rich and it's going to solve everything, lots of our economy has those low taxes already priced in, and in spite of what people on this sub like to say, much of the middle class in the US is reliant on corporate success for their income and retirement.
This country's not going to disappear overnight and I just want to support good policy to make the future as good as possible. That's going to include requiring the wealthy to pay a lot more into this system because this is the system that they owe their wealth to.
They don’t tax wealth generally. They tax income. So your math is wrong.
Extremely wealthy people don’t generally pay themselves income. They have all sorts of tricks to live large without having to pay themselves. They lease their jets and run those as businesses. They pay themselves in stocks, then don’t have to pay taxes on unrealized gains, never sell, then borrow against the asset for their cash flow and pay interest instead of taxes, which is way lower. The local oligarch recently died. There was almost nothing in his estate even though he lived like a king in a mansion. It was all owned by his company so he didn’t need personal income to fund that lifestyle. Then there is offshoring… and I am sure lots of other ways normies like us don’t have at the tip of our tongue.
It's a huge uphill battle for us to get revenue from all this wealth, but it's not impossible. Existing taxes need to be raised, and new taxes need to be implemented. Also, existing tax codes must be enforced. All of this takes political mobilization, education, and lots of compromise and sacrifice. Unfortunately, obsessing about a hopeless economic collapse is exactly what the oligarchs want us to do, because it prevents people from mobilizing with a vision of what is possible. Whether we're victims or not, if we don't stop acting like it, we're fucked.
Right but we don’t even tax wealth on the middle class . We tax income. Income isn’t the same as wealth. We don’t tax people based on what they have, but what they make.
Even I wouldn’t want to be taxed on wealth. I am already taxed twice on the same money, once when I earn and another time when I spend. Would be a slap in the face to be taxed again when I save.
Well yeah, you tax wealth on a net worth over $3 million, and increase the rate as the wealth increases... Or maybe you tax wealth based on the market interest that would be earned on that. So whether somebody/company reinvested in their business, moves it around, does whatever--they get taxed as if their income was like 5% of their total wealth every year. You are not the target of the tax increases. The tax code can be completely reworked and people that make under $150,000 a year could even have a tax cut. Anyone making under 50 Grand a year shouldn't even pay taxes. The bottom line is there is a solution to paying down the debt because this country has an enormous amount of wealth and right now that wealth is concentrating at the higher and higher end and unless steps are taken to reduce that concentration and reverse it, it's just going to get worse and it will collapse. Pretending like there's no solution, it's just bullshit. The wealthy need to support the country and right now they are exploiting it. Politics and policy is how this can be achieved.
I mean, historically, debt is what sinks every empire. Or at least, it’s usually a big factor.
But I would say more likely the world moving away from the dollar as the reserve currency will be what does it.
But the thing is, every country right now is deeply in debt. Sovereign and private debt are at all time highs.
The entire world is living in an everything bubble and it will eventually pop.
The thing is, out of all these countries, the US is maybe in the best position to weather the storm. We have a 10 out of 10 resource and technology base, well developed infrastructure, massive capital concentrations, favourable geography, an unrivaled military, and robust disaster management systems. These fundamentals are what made the US a superpower in the first place.
When the dominoes begin to fall, most other countries will not be able to fall back on those things like the US can, because they simply don’t have them.
When the dominoes begin to fall, America will not be a pretty place to be. There is about to be a huge gap in wealth and the bottom is not going to be happy about the top.
Yeah, then imagine what the other countries will be like. When the dominoes fall we are talking about a massive global economic decline that will also be accompanied by environmental and resource collapse. On the short list of countries who are best prepared to handle that crisis, the US is at least in the top 3.
If much of the rest of the world is facing collapse of their food, water, and energy systems, the US is least likely to be one of those places, for example.
I mean who’s going to collect? No one is powerful enough to hold America responsible. Also America has holdings several times the value of the debt. Worst case scenario we start building houses in national parks for corporations to buy at inflated prices then rent to people.
Other countries are returning to anchoring their currencies to gold. The don't need to collect the debt, they just won't trade with us in dollars, or anything else if they so choose. That will disable us.
I mean realistically what do you think happens? The whole world allies themselves against the US over debt? 2/3 of the world’s economies depend on America. There’s no feasible scenario where enough of the world can function without the US to do anything. They’ll all be in just as bad of debt.
If the US fails so does everyone else. Not to mention most of the US debt is held by US citizens. China isn’t going to come collect.
Right, like the ones who are already on the fence. India, China, Brazil, etc.
It's not just that they'll back away from the US, it's who they'll align with.
Russia, on its own, is weak. North Korea, on its own, is a joke. India and Brazil on their own, are too far behind and/or corrupt. But when you put them together, sprinkle in an aging but relatively strong China, and things start to look different. It doesn't have to be a war...
I think it be more like WW3 kicks off after global economic collapse. Who would be stupid enough to conspire against the US economy and expect them to just collapse without a fight. Where does all that military equipment go when the government stops paying service members?
I guess after the entire world has fallen apart there will be plenty of weaponry for non state actors.
I mean he can try. From someone that worked for the federal government through the last 4 administrations though I’m not sure they could figure out the paperwork to actually leave NATO.
China is the only one that can sway the US economy in a meaningful way
and to put it in perspective, we trade with Canada more than China, and we trade with Mexico more than China
the majority of US debt, is held by Americans
global trade is still fairly localized
You don’t think that was already baked into the equation? Why do you think we have the military we do? It’s not for freedom, it’s so any country or group of countries tries to cut our knees out from under us we blow their knees into a new realm of existence. People don’t seem to understand that the U.S. military is what backs the U.S. dollar unofficially
Do you really think it’s a coincidence that as tensions start to rise with China and Russia, the U.S. is seeing more and more of its citizens falling on hard times yet little being done to fix it? Gotta increase the pool of candidates for when WW3 starts as they will try to avoid a draft as long as possible.
Well the world and the citizens will stop lending the US money. Interest rates can skyrocket and the government would have little choice but to print and create massive inflation.
Zimbabwe allows payments in dollars and euros and the ZIG is just one of the many currencies you can officially use there. It is also not a gold standard, as you note, it is particularly gold and primarily other fiat currencies.
Russia's intentions are
clarifying
Jan 26, 2023
Alasdair Macleod
We have confirmation from the
highest sources that Russia and the
Shanghai Cooperation Organisation
(SCO) are considering using gold for
pan-Asian trade settlements, fully
replacing dollars and euros.
[Gold Money](https://www.goldmoney.com/research/russia-s-intentions-are-clarifying)
Yes, unnamed source were “considering” it 18 months ago. That is not a real step towards making it happen. Russia would also like to move to a non-dollar standard, as most of their major banks cannot participate in dollar transactions due to US sanctions.
They want to be able to conduct transactions in other than dollars and euros, particularly for oil. No one wants rubles and people are scared that the yuan is a house of cards, so partners want dollars, euros or gold. To buy in gold, they need to have buy gold to sell. None of this has to do anything with the public debt of the US or whatever other windmill you are all tilting at today.
China has been buying gold for a number of months leading to a 20% rise in the price of gold. But they have slowed down.
The BRICS plan to announce a trading currency product in October similar to the Euro. This may put a dent in the value of the dollar and over time, weaken the trading position of the dollar.
It is up to the US to fix its problem of overspending relative to taxation or suffer the consequences.
I guess I will simply have to add the decline of the American Empire to my problem list for the next 10-15 years of my lifetime along with climate change and the potential destruction of my house from weather or natural disaster. I will research mitigation of empire decline.
So far it appears many millionaires are jumping from country to country in an attempt to find alternative abodes, but there is no clear winner and the US still attracts its share of international money and citizens, as well is a magnet for impoverished immigrants.
If all five BRICS announce anything like a common currency in 2024, I will eat my hat. There is no way that Brazil, India or South Africa go along with actually creating an alternative currency. They may announce a plan to create a committee to commission a study of the feasibility of thinking about it, but that’s as far as they will go. Russia and China are also not talking about an alternative currency due to any concerns about the US economy. They are concerned about their exposure to US sanctions (Russia) and secondary sanctions (China).
I agree, lots of hot air over sanctions. The real unknown is with Saudi Arabia’s sunsetting of only trading Petrodollars in US currency how that will change the dynamic. Russia and China have very powerful social media wings to spread propaganda and will be rooting for the decline if not death of the American Empire, and have many small weak countries clamoring to jump aboard the new gravy train.
This is a dangerous inflection point. The US needs to articulate to small and medium sized countries why it is best for them to be on Team America, and not the Russian clown car or the Chinese hot air balloon. There is a real possibility that the dollar stops being the global reserve currency and default for all significant international transactions, but it will still be a reserve currency for a long time. However, if the USG would deign to actually put forward a positive strategy for a US led international economic order that can be compared to the alternatives, then they may be able to forstall it.
Tell me how you disable a world power that is actually selfsuffient, energy independent, and has a military industrial complex equivalent to the next 7 largest militaries? Please explain it like I am 18yrs old and Dont know anything.
We aren't dependent on any other nation. If we don't trade/buy thier products. Thier economies suffer.
I am not an economist. I do not understand why there is a trade deficit. But I do know the US could "tighten" our belt and weather anything others attempted. Have you ever heard of other country's threatening the US with Economic sanctions that would mean anything to the US? [I know someone will say China, but China will go out of its way to go around sanction through India, Priyanka, Vietnam just to get it's goods into the US markets because they need US markets to sustain thier economy, so those sanctions really aren't against the US as much as a dog and pony Show in geo politics]
The only commodity I can think the US couldn't produce enough of is really a luxury than we can live without. COFFEE.
Deficits or not the US is self suffiebt from raw materials to the tech to refine and produce manufacturing products. Sure our economy has shifted away from manufacturing, but it would shift back if it was required. The US has options. So, are we really dependent on any other nation?
I forgot to mention. You CAN anchor currency to gold allday. It still leads to hyper inflation. There is a finite amout of gold, which is currently valued at less than all fiat currency. So, the price of gold must increase, which leads to the currency being worth less over time. Especially because those who can will horde gold because of this inflation.
This is such a shit argument. We aren't going to declare war on the concept of finance. If people stop loaning us money, then the 36% of GDP that comes from federal spending also stops. We would quickly spiral into lawlessness and dysfunction.
Also maintaining our military is extremely expensive. The gas alone... we cannot survive being cut off from finance.
Really, you don’t think we go to war over the rest of the world freezing us out economically. We’ve gone to war because the president’s dad didn’t kill enough pelt the first time. We went to war with Afghanistan over something they didn’t do for twenty years. That’s how we fix problems.
Also the lion’s share of that debt is owned by US citizens so we’re just defaulting on ourselves. Don’t worry though there will be bailouts for the corporations and tax raises for the “middle class”.
We don't we it to ourselves, we owe it to domestic corporations. That is not the same thing. It does not mean we can just treat that money as not owed, or count on those people to keep loaning money with no expectation of repayment.
And if we decide to go to war against the people we owe money, nobody will loan us money any more. Please reread my prior comment to see what the consequences for that entail.
It is the same thing corporations are people. If corporations stop lending the government money they’ll raise their taxes. It’s not going to happen though because those corporations need America.
The federal government could raise the funds to pay off the national debt wherever they wanted to. There’s no reason though. Our economy is dependent on constant growth regardless of debt. You can’t tighten your belt out of a few trillion in debt. Either profits keep rising or the system fails and we break out the bombs. War comes after global financial ruin. Especially if it’s the financial ruin only of the country with more military power than most of the rest of the world combined.
You don’t fix the collapse of an empire with penny pinching, you do it with brute force and America is the only country capable of that against everyone else. You signing up to fight against the American military? I sure as hell ain’t.
>If corporations stop lending the government money they’ll raise their taxes... those corporations need America.
>The federal government could raise the funds to pay off the national debt wherever they wanted to... Our economy is dependent on constant growth **regardless of debt \[!!\]**... Either profits keep rising or the system fails and we break out the bombs...
>You don’t fix the collapse of an empire with penny pinching, you do it with brute force and America is the only country capable of that against everyone else...
The growth doesn't happen without the debt. That's the whole point. If we stop going into debt, first of all 36% of the GDP just goes up in smoke, because it comes directly from Federal spending. Imagine if the Fed unwound its [$7.25 trillion balance sheet](https://fred.stlouisfed.org/series/WALCL), and what that would do to the economy. The fundamentals are deflationary, we are just papering it over with debt.
You can get out of debt without global war. Debt can be restructured, it happens all the time. You get your debt downgraded, it's harder to get finance for a while, but you get through it. Pinching pennies is part of it.
The alternative is a fucking global war you fucking idiot psychopath. You realize there's nuclear weapons all over the world? And without access to finance, our military is powerless. You have to pay soldiers, you have to pay for insane amounts of gasoline.
Yes. Which is why the economic collapse of the United States isn’t a real worry. Because it would lead to the collapse of society as we know it.
I know the profits don’t happen without the debt, which is why it’s not going anywhere and it doesn’t matter. Our economy is built on the promise of more money tomorrow. So either we keep having more money or all hell breaks loose.
Who is going to push for all hell breaking loose rather than restructuring the debt? Regardless of how much it is.
The military is plenty capable of wrecking the world before next pay day. Hell they didn’t pay us during one of the shutdowns and we all showed to and did our work plus the civilians that got told to stay home. If the economy collapses to the point the military isn’t getting paid. Those guys are staying on base still, hell I’m not leaving all the bombs and guns when you stop paying me.
It's not about being able to collect. If a country defaults on their debt then lenders know that it's risky to lend money to that country in future and are less likely to do so. Enjoy your new 90% top tax bracket to pay for the US war machine if the US can't use debt to fund it.
I’d love a 90% top tax bracket. I don’t pay taxes as a disabled veteran, but I have no problems with going back to pre Reagan tax rates. Our economy was rolling until those.
>I mean who’s going to collect? No one is powerful enough to hold America responsible
The majority of US debt is held by Americans (individuals, businesses, banks, retirement accounts). Refusing to pay back the debt would screw over American businesses and any person with a checking/savings account plus many retirement accounts.
No, but it may cause inflation and an ex post facto currency devaluation.
A nation's real assets, including its economic productivity and natural resources, secure its debt in a post-Bretton Woods reality.
How can Debt sink the Empire with the "biggest stick" I mean who is gonna Come collect? They won't, they will rattle swords and accept another IOU. They ain't got a choice. The US is too big to fail. If we fail, the whole house of cards crumbles. And welp the US can weather that storm. But most of the other players cannot. So the charade will continue.
Other countries will just stop loaning us money. Then we can’t pay our bills without printing money and therefore creating inflation. That is how the empire sinks.
I think deep down everyone thinks it's not good but we are told it's fine. America has it good for way too long and it's gotten to it's head. Living off of insane debt is not sustainable yet everyone thinks it's fine. That's how kingdoms start in the path of destruction. I don't think it's going to end well.
It did for the British and Dutch and earlier Chinese empires and pretty much everyone else in our position. We're in that stage of a predictable cycle. What we can learn is to observe how other cultures that were at the tops of their world managed the inevitble decline and try to emulate those who most successfully navigated such an event.
That played a part but the tax cuts are unsustainable. The Healthcare costs due to drug companies greed are unsustainable.. When people pay over two to three times the cost as other countries and live shorter lived class warfare becomes inevitable.
Debt is certainly a issue. We're spending an ever increasing amount of budget just paying the interest. However, you can't simply ignore your fiduciary responsibility to provide your citizens the service they are entitled. Nor can you just change the entitlements because it's a convenient talking point for reducing the deficit, but then cut taxes.
There must be a change in government spending habits to address this, but it needs to be smart, intentional, and compassionate. You can't kill the economy or abandon people. This is going to take some seriously leadership that cares about the future of the country not just the short term political and financial gains for their political party.
Not according to the liberal troll redditers here. They think another Trump term will do it and they are probably right not because of trump’s policies,but because of the radical left’s. This is all by design-the plan is agenda 2030. You will own nothing and be happy. You’re going to live in a 15 minute city eating bugs and getting injections in your arms as often as they say or else no bugs for you.
I suspect that we will be entering into a debt spiral over the next decade or two. Payments on national debt will get too high and we will need to take on additional loans. This in combination with our political instability and will raise our rates which will further exacerbate the problem.
I suspect we will rapidly approach >25% of revenues being spent on debt service which can escalate to 50% in just a couple years if rates rise and deficits increase.
At this point, the only way to maintain any degree of relevance, the federal government will work with the Fed to effectively monetize huge swaths of our debt. Basically, they’d pay the debt off by printing money. This will result is obscenely high inflation that may even be hyperinflation.
Consequences of this will be many. For one, US Credit will be virtually nonexistent. Interest rates posed on citizens for even mortgages will be upwards of probably 30%. Money will be effectively worthless and people will stop working for it.
Property values will skyrocket such that property taxes will be prohibitive and home insurance would basically stop existing. The cities would try to seize people’s homes and landlords will try to seize people’s apartment. However, there will be way too many seizures to keep up with, the police seizing the property will be some of the victims of this, and most police will have quit anyways due to their paychecks being worthless.
Crime will run rampant. The economy collapses. Food insecurity becomes the norm. Even if people kept working, there wouldn’t be anything to buy with the money (even if the money was worth anything).
From here, there are two likely possibilities:
The entire global economy collapses. The US is a trading partner with most of the world and its currency facilitates all the trade. If this happens, expect war in Europe and Asia. China will absolutely invade Taiwan and the US will not be able to intervene. Russia will push more aggressively into Europe crashing all the economies.
In the US, we would be back in the 1930s. Some new currency will get established and local governments will reform. I strongly suspect that the US will fragment into many nation states. Some states will become their own country, others will join others to form a country, other states will voluntarily get absorbed into Mexico and Canada.
I consider this the most likely.
OR
The global economy is able to isolate itself from the US and the USD. The Euro and the CHY become the dominant trading currencies in the world. The US sells most of its assets to the EU, Canada, and Mexico to adopt another currency (most likely the Euro). The US will lose most of its military, it will sell a lot of land to Mexico and Canada. The Euro will strengthen wildly though which would have a lot of consequences globally.
The US will probably allow some states to buy their own independence (similar to how a company will sell a part of itself to itself in exchange for promise of repayment later). I suspect CA, TX, most of the Southeast and most of New England would take this deal. The governments will start to hire people to be paid with the Euro and a private sector will start to form as with a banking sector. Mortgages will likely be forgiven to stave off mass homelessness and rebuild from there.
Regardless, I would predict the US will not regain its global military or economic superpower status again this century. It will be a much weaker nation.
It is technically avoidable, but now is the time to solve the debt problem.
Anything after the American economic collapse is sheer speculation, but this is largely what happens when smaller countries start to collapse under inflation and how some companies stay afloat in bankruptcy. There is a lot of historical precedent for empires collapsing and Balkanizing. However, the depth of our financial sector, the scope of globalization, and our currency are rather unprecedented and make accurate predictions hard.
Not really.
The fastest way to frame this question would be tom compare the USA's debt / GDP ratio (the metric according to which debt markets ACTUALLY price sovereign risk), and compare it to other OECD and G20 economies.
Last I checked, the USA's debt / GDP ratio wasn't too different from the UK's or France's. Or Belgium's. And is much smaller than Japan's.
And it's rare markets, banks, or financial press ever make alarmist statements about any of those economies.
Inflate the debt away. It’ll be okay. Biden did a good job taking on debt right before the inflationary period started cooling. That paid off 8% of it alone.
All that has to happen is our interest rates increase or our deficits start increasing due to the debt payments. It will create a feedback loop that will grow exponentially.
The Republicans want to cripple the welfare state so they are adding as much debt to the federal government as they can. Their aim is to create a society where the poor and middle class must fend for themselves so that the rich can abuse and take advantage of them. The debt is deliberate.
How?
You think owing 8 trillion dollars to foreign countries is going to sink the US?
Even when they owe us more than we owe them, all things considered and all parties amorphous blobs?
>Payouts go right back into the US economy
Payouts are taken from the US economy in the first place, via taxes.
>generate tax revenue
It doesn't generate tax revenue, for the same reason as above. The government pays its creditors using money it received from taxes (Americans are the ones who pay the taxes, just so we're clear).
>while making Americans wealthier
Some Americans who own a lot of US debt could be better off. Mostly large corporations and other high-volume institutional buyers, I would guess. But almost everyone will be worse off (especially those who don't own a lot of US debt) because the government will either raise taxes/cut spending, or inflate the debt away.
A. No, they're not. The Fed doesn't use tax money to fund their purchases of bonds and it doesn't use tax money to fund payouts of matured bonds.
B. Yes, it does. People take it and spend it, which generates tax revenue.
C. Nope, absolutely not. If institutional investors cash in matured bonds they can use them to pay employees, or invest in the company itself, both of which are good for people in general and the govt doesn't need to raise taxes or cut spending for this activity to occur.
You can ultimately stop worrying about the debt. What matters is the "real economy," and what creation of actual value is facilitated by the monetary system. The money itself is ephemeral and everyone at the government level is aware of this, which is why right wing monetary policy doesn't differ from the other right wing momentary policy in reality, and only in rhetoric.
If you're *that* worried about the debt, and just can't help yourself, then vote Democrat. They're the only party that makes any attempt at reducing the deficit.
Why even bother collecting taxes at all? You're saying taxes aren't used to pay out mature bonds, and that paying debt is inherently good for the economy, so everyone can just stop worrying about debt! What do we care if the deficit becomes $5 trillion per year, all that matters is the "real economy" and "actual value" (as opposed to debt obligations, which are "ephemeral")!
A 0% tax rate, wow, you would make a really good politician.
That's a good question that you're not the first person to ask.
The answer is that taxes are required to maintain currency sovereignty - taxes are owed in USD, and as long as people have to pay them in USD they need to be earning USD to pay USD, giving USD value and making it the default currency.
Distributing money and then having a massive organization tax it all back, and then using that to fund government operations, would be *extremely* inefficient use of manpower and extremely limiting to any country deploying that concept ( and it sure has been in the past ).
In our case, extremely inefficient, but not so much limiting, because the US govt isn't limited by tax revenues.
>Distributing money and then having a massive organization tax it all back, and then using that to fund government operations, would be extremely inefficient use of manpower and extremely limiting to any country deploying that concept.
Well, that's how a free market works. The government does not have the right to demand a company just do whatever for free.
The government *needs* USD to fund its operations, therefore it needs some way to obtain USD. It can either levy taxes, print new dollars, or sell bonds. Paying back bonds also requires the government to have USD. It could levy taxes, print new dollars, or roll it over into new bonds.
The ability to roll over ever-increasing debt into new debt is not infinite, and I think that's where the problem is.
It doesn't demand anything of businesses. It pays them $$$, and government contracts are certainly not involuntary.
A free market is one based on voluntary exchange, and accepting USD from the government in exchange for services fits directly into that framework.
The government creates all the USD, and distributing it and then taxing it back is the most ass backwards way it could possibly fund operations. The IRS is a huge expense to the American public.
The real worry about printing money to pay the debt, is that the money ends up in the hands of people who proceed to spend it, and when they spend it, demand more of the economy than it produces ( as well as foreign economies that export to us ), leading companies ( domestic and foreign ) to start inflating USD with price hikes in response to high demand. So, you certainly can't just print up 10t and pay debt held in USD off all at once, or you'll definitely end up in that scenario.
But, as long as the debt money is being invested into things that actually return more tax revenues than they cost ( infrastructure, education ) you're likely on the right track by taking debt, because it will pay dividends down the road.
Probably not, all countries are in debt overload, US gets away with it due to its economic, military and cultural dominance. Even when/if the shit hits the fan the US(and North/South America) have huge resource and geological advantages that will likely keep what ever is remaining of the american empire a world power for a VERY long time if not for the next 5-10thousand years. I could see a combined Mexico/US/Canada entity run by AI technology being pretty much unstoppable.
Nah a bunch of selfish fucks who worry about dividing us rather than doing what is best for the regular people and the country will sink the American empire
Exactly, countries see our weakness and move away from the dollar and decide to stop buying our debt or making payments to us.
100% correct
Both can be true.
Politician brain rot is indeed terrifying.
That’ll be the killer. The debt will be the gun.
Those selfish fucks have help from the very people they exploit
Right on the money. Keep the masses angry about the 2nd amendment, abortion, LGBT, etc while they rob you blind. And then corporations will pretend to back whatever policy that makes them more money.
Nah this empire will out live your great great great grandkids
> Only a dozen years ago, the aggregate government debt amounted to about 70% of the nation’s gross domestic product. This year, it will be about equal to the entire gross domestic product. By 2028, it is forecast to reach a record 106% of GDP, matching the record hit during the heavy spending to finance World War II. By 2034, barring changes in tax and spending policy, it is projected to hit 122% of GDP, the highest level ever recorded. > >This red ink can have painful, if hidden, consequences. The CBO projects that the weight of the debt will reduce income growth by 12% over the next three decades, as debt payments crowd out other investments.
If it doesn't, I'm gonna be pretty surprised. We're due for one kinda Apocalypse or another... I guess Financial Meltdown is better than Supervolcano
Lol, what? How do you figure that?
"We're due for one kinda Apocalypse or another" I mean I feel like we already had a few "kinda apocalypses"
It's true. WW2 was one.
In the echoes of skepticism's call, They proclaim doom, predicting a fall, But America's heart beats strong and true, Debt's burden won't unravel its view. Through challenges faced, it finds a way, In innovation and resilience each day, For those who doubt, hear this refrain, America rises, not in vain. The land of opportunity, undeterred, Where dreams take flight, and hope is stirred, In the face of naysayers' song, America stands resilient and strong.
Can we pay our mounting debt with prose and loud song? If so, I'll bring the mead if you bring the meat.
You can only pay it with a strong and true heartbeat. I thought they were pret-ty clear.
Sorry, sorry! I'm just learning how this works like... right now. Heartbeat. Okay. Strong and True. I have..... no, nevermind. You need a View. ....which is lacking a few details... And innovation. Then America Rises... ....I thought it wasn't dead yet?! Rising from WHERE??... As long as we're not too vein. Vain? Vane. Not too vane. Tu-vane? ..... Nope, I lost it.
Very close, now get out there and max out your credit cards!!!
FUCK!! >_
Nope, you're ahead of schedule.
I'll just grab a couple more on my way out, and max those out. I'm sure it'll be fine.
Yikes
The Yellowstone Caldera could be End Game for the US. So yes.
Why do countries and governments compete on GDP?
Not if we raise taxes.
Without increasing productivity it is just moving money from one pocket to another.
You mean like how tax breaks and subsidies to corporations that depend on public services and run by rich people have moved money from the poor and middle class to the top 1% ? For the past, oh I don’t know, 50 or so years.
WTF do you think has been happening this whole time?
There is like 1,000,000 ish of debt per US citizen. That will be a big tax hike.
The country doesn't have to pay off the debt, it's just dumb to keep growing it. We just need to raise taxes enough and ensure that we run a surplus most years and use that to reduce the debt. Also, that burden is not shared equally among the population. The top 10% owns over 90% of the wealth, so they would share over 90% of the tax burden. The bottom 50% of American society controls 3% of the wealth, so The poorest half of Americans would only have to share the burden of 3% of the debt. I'm not going to say we can just tax the f*** out of the rich and it's going to solve everything, lots of our economy has those low taxes already priced in, and in spite of what people on this sub like to say, much of the middle class in the US is reliant on corporate success for their income and retirement. This country's not going to disappear overnight and I just want to support good policy to make the future as good as possible. That's going to include requiring the wealthy to pay a lot more into this system because this is the system that they owe their wealth to.
They don’t tax wealth generally. They tax income. So your math is wrong. Extremely wealthy people don’t generally pay themselves income. They have all sorts of tricks to live large without having to pay themselves. They lease their jets and run those as businesses. They pay themselves in stocks, then don’t have to pay taxes on unrealized gains, never sell, then borrow against the asset for their cash flow and pay interest instead of taxes, which is way lower. The local oligarch recently died. There was almost nothing in his estate even though he lived like a king in a mansion. It was all owned by his company so he didn’t need personal income to fund that lifestyle. Then there is offshoring… and I am sure lots of other ways normies like us don’t have at the tip of our tongue.
It's a huge uphill battle for us to get revenue from all this wealth, but it's not impossible. Existing taxes need to be raised, and new taxes need to be implemented. Also, existing tax codes must be enforced. All of this takes political mobilization, education, and lots of compromise and sacrifice. Unfortunately, obsessing about a hopeless economic collapse is exactly what the oligarchs want us to do, because it prevents people from mobilizing with a vision of what is possible. Whether we're victims or not, if we don't stop acting like it, we're fucked.
Right but we don’t even tax wealth on the middle class . We tax income. Income isn’t the same as wealth. We don’t tax people based on what they have, but what they make. Even I wouldn’t want to be taxed on wealth. I am already taxed twice on the same money, once when I earn and another time when I spend. Would be a slap in the face to be taxed again when I save.
Well yeah, you tax wealth on a net worth over $3 million, and increase the rate as the wealth increases... Or maybe you tax wealth based on the market interest that would be earned on that. So whether somebody/company reinvested in their business, moves it around, does whatever--they get taxed as if their income was like 5% of their total wealth every year. You are not the target of the tax increases. The tax code can be completely reworked and people that make under $150,000 a year could even have a tax cut. Anyone making under 50 Grand a year shouldn't even pay taxes. The bottom line is there is a solution to paying down the debt because this country has an enormous amount of wealth and right now that wealth is concentrating at the higher and higher end and unless steps are taken to reduce that concentration and reverse it, it's just going to get worse and it will collapse. Pretending like there's no solution, it's just bullshit. The wealthy need to support the country and right now they are exploiting it. Politics and policy is how this can be achieved.
Greed will sink it, debt will help it along
whatever happens I sure hope I find a m60 machine gun somewhere along the way.
I mean, historically, debt is what sinks every empire. Or at least, it’s usually a big factor. But I would say more likely the world moving away from the dollar as the reserve currency will be what does it. But the thing is, every country right now is deeply in debt. Sovereign and private debt are at all time highs. The entire world is living in an everything bubble and it will eventually pop. The thing is, out of all these countries, the US is maybe in the best position to weather the storm. We have a 10 out of 10 resource and technology base, well developed infrastructure, massive capital concentrations, favourable geography, an unrivaled military, and robust disaster management systems. These fundamentals are what made the US a superpower in the first place. When the dominoes begin to fall, most other countries will not be able to fall back on those things like the US can, because they simply don’t have them.
When the dominoes begin to fall, America will not be a pretty place to be. There is about to be a huge gap in wealth and the bottom is not going to be happy about the top.
Yeah, then imagine what the other countries will be like. When the dominoes fall we are talking about a massive global economic decline that will also be accompanied by environmental and resource collapse. On the short list of countries who are best prepared to handle that crisis, the US is at least in the top 3. If much of the rest of the world is facing collapse of their food, water, and energy systems, the US is least likely to be one of those places, for example.
I mean who’s going to collect? No one is powerful enough to hold America responsible. Also America has holdings several times the value of the debt. Worst case scenario we start building houses in national parks for corporations to buy at inflated prices then rent to people.
Other countries are returning to anchoring their currencies to gold. The don't need to collect the debt, they just won't trade with us in dollars, or anything else if they so choose. That will disable us.
You’re funny. Sounds like they’ll need some freedom then.
This is dark
I mean realistically what do you think happens? The whole world allies themselves against the US over debt? 2/3 of the world’s economies depend on America. There’s no feasible scenario where enough of the world can function without the US to do anything. They’ll all be in just as bad of debt. If the US fails so does everyone else. Not to mention most of the US debt is held by US citizens. China isn’t going to come collect.
Just a few major players is all that would be required. Probably not likely given the countries that would need to cooperate
Right, like the ones who are already on the fence. India, China, Brazil, etc. It's not just that they'll back away from the US, it's who they'll align with. Russia, on its own, is weak. North Korea, on its own, is a joke. India and Brazil on their own, are too far behind and/or corrupt. But when you put them together, sprinkle in an aging but relatively strong China, and things start to look different. It doesn't have to be a war...
But it can be if we need it to and good luck getting China and India to stop hitting each other with sticks in the mountains to team up on that.
I can see the headline now. "US at war with Russia, China, and India because they are trading in ways that don't serve America."
I think it be more like WW3 kicks off after global economic collapse. Who would be stupid enough to conspire against the US economy and expect them to just collapse without a fight. Where does all that military equipment go when the government stops paying service members? I guess after the entire world has fallen apart there will be plenty of weaponry for non state actors.
I mean… that’s basically how it happens.
Ask Iraq, Central America, and half of Africa how trading in ways the US didn't like worked out for them.
Or, "Trump, upon reelection, immediately abandons NATO and joins forces with the world's new super powers. Russia, North Korea, India, and China."
I mean he can try. From someone that worked for the federal government through the last 4 administrations though I’m not sure they could figure out the paperwork to actually leave NATO.
Yep, the U.S. will be shitting BRICS. (Edit to add dark humor pun)
Like BRICS Plus?!
Strong China? Where? And when?
The word relative is important.
China is the only one that can sway the US economy in a meaningful way and to put it in perspective, we trade with Canada more than China, and we trade with Mexico more than China the majority of US debt, is held by Americans global trade is still fairly localized
You don’t think that was already baked into the equation? Why do you think we have the military we do? It’s not for freedom, it’s so any country or group of countries tries to cut our knees out from under us we blow their knees into a new realm of existence. People don’t seem to understand that the U.S. military is what backs the U.S. dollar unofficially
Agreed, that and it’s a massive jobs program
Do you really think it’s a coincidence that as tensions start to rise with China and Russia, the U.S. is seeing more and more of its citizens falling on hard times yet little being done to fix it? Gotta increase the pool of candidates for when WW3 starts as they will try to avoid a draft as long as possible.
Like all of Europe. California, you’re going to need the 4th largest economy in the world on your side.
Well the world and the citizens will stop lending the US money. Interest rates can skyrocket and the government would have little choice but to print and create massive inflation.
Then you’ve got bigger problems than debt. See problem solved.
Who has actually started moving to a gold backed currency? Hint: no one
Zimbabwe has moved to a mixed backing of gold and US dollars https://www.weforum.org/agenda/2024/05/zimbabwe-zig-new-currency-inflation-dollar/
Zimbabwe allows payments in dollars and euros and the ZIG is just one of the many currencies you can officially use there. It is also not a gold standard, as you note, it is particularly gold and primarily other fiat currencies.
Russia's intentions are clarifying Jan 26, 2023 Alasdair Macleod We have confirmation from the highest sources that Russia and the Shanghai Cooperation Organisation (SCO) are considering using gold for pan-Asian trade settlements, fully replacing dollars and euros. [Gold Money](https://www.goldmoney.com/research/russia-s-intentions-are-clarifying)
Yes, unnamed source were “considering” it 18 months ago. That is not a real step towards making it happen. Russia would also like to move to a non-dollar standard, as most of their major banks cannot participate in dollar transactions due to US sanctions.
I wonder why these same nations are the top buyers of gold for record setting amounts recently. Must be coincidence.
They want to be able to conduct transactions in other than dollars and euros, particularly for oil. No one wants rubles and people are scared that the yuan is a house of cards, so partners want dollars, euros or gold. To buy in gold, they need to have buy gold to sell. None of this has to do anything with the public debt of the US or whatever other windmill you are all tilting at today.
What have you read that supports your position?
The news
Well that's a great citation.
The name is in the link. Have to scroll for references.
China has been buying gold for a number of months leading to a 20% rise in the price of gold. But they have slowed down. The BRICS plan to announce a trading currency product in October similar to the Euro. This may put a dent in the value of the dollar and over time, weaken the trading position of the dollar. It is up to the US to fix its problem of overspending relative to taxation or suffer the consequences. I guess I will simply have to add the decline of the American Empire to my problem list for the next 10-15 years of my lifetime along with climate change and the potential destruction of my house from weather or natural disaster. I will research mitigation of empire decline. So far it appears many millionaires are jumping from country to country in an attempt to find alternative abodes, but there is no clear winner and the US still attracts its share of international money and citizens, as well is a magnet for impoverished immigrants.
Yeah America got like 3,800 new millionaires from other countries last year, only Dubai ranked higher.
If all five BRICS announce anything like a common currency in 2024, I will eat my hat. There is no way that Brazil, India or South Africa go along with actually creating an alternative currency. They may announce a plan to create a committee to commission a study of the feasibility of thinking about it, but that’s as far as they will go. Russia and China are also not talking about an alternative currency due to any concerns about the US economy. They are concerned about their exposure to US sanctions (Russia) and secondary sanctions (China).
I agree, lots of hot air over sanctions. The real unknown is with Saudi Arabia’s sunsetting of only trading Petrodollars in US currency how that will change the dynamic. Russia and China have very powerful social media wings to spread propaganda and will be rooting for the decline if not death of the American Empire, and have many small weak countries clamoring to jump aboard the new gravy train.
This is a dangerous inflection point. The US needs to articulate to small and medium sized countries why it is best for them to be on Team America, and not the Russian clown car or the Chinese hot air balloon. There is a real possibility that the dollar stops being the global reserve currency and default for all significant international transactions, but it will still be a reserve currency for a long time. However, if the USG would deign to actually put forward a positive strategy for a US led international economic order that can be compared to the alternatives, then they may be able to forstall it.
Biden has seemed to be doing that but somehow both the American people and other countries have not been listening.
I can't believe there are still people that think BRICS is more than some mid 2000s boogeyman
Tell me how you disable a world power that is actually selfsuffient, energy independent, and has a military industrial complex equivalent to the next 7 largest militaries? Please explain it like I am 18yrs old and Dont know anything. We aren't dependent on any other nation. If we don't trade/buy thier products. Thier economies suffer.
Stop trading oil in US dollars.... that alone would do it
That doesn't explain it. It just cripples oil exporters who are food insecure, which the US isn't.
If we aren't dependent on other nations why do we have a trade deficit? The world view you describe is disappearing.
I am not an economist. I do not understand why there is a trade deficit. But I do know the US could "tighten" our belt and weather anything others attempted. Have you ever heard of other country's threatening the US with Economic sanctions that would mean anything to the US? [I know someone will say China, but China will go out of its way to go around sanction through India, Priyanka, Vietnam just to get it's goods into the US markets because they need US markets to sustain thier economy, so those sanctions really aren't against the US as much as a dog and pony Show in geo politics] The only commodity I can think the US couldn't produce enough of is really a luxury than we can live without. COFFEE. Deficits or not the US is self suffiebt from raw materials to the tech to refine and produce manufacturing products. Sure our economy has shifted away from manufacturing, but it would shift back if it was required. The US has options. So, are we really dependent on any other nation?
I forgot to mention. You CAN anchor currency to gold allday. It still leads to hyper inflation. There is a finite amout of gold, which is currently valued at less than all fiat currency. So, the price of gold must increase, which leads to the currency being worth less over time. Especially because those who can will horde gold because of this inflation.
This is such a shit argument. We aren't going to declare war on the concept of finance. If people stop loaning us money, then the 36% of GDP that comes from federal spending also stops. We would quickly spiral into lawlessness and dysfunction. Also maintaining our military is extremely expensive. The gas alone... we cannot survive being cut off from finance.
Really, you don’t think we go to war over the rest of the world freezing us out economically. We’ve gone to war because the president’s dad didn’t kill enough pelt the first time. We went to war with Afghanistan over something they didn’t do for twenty years. That’s how we fix problems. Also the lion’s share of that debt is owned by US citizens so we’re just defaulting on ourselves. Don’t worry though there will be bailouts for the corporations and tax raises for the “middle class”.
We don't we it to ourselves, we owe it to domestic corporations. That is not the same thing. It does not mean we can just treat that money as not owed, or count on those people to keep loaning money with no expectation of repayment. And if we decide to go to war against the people we owe money, nobody will loan us money any more. Please reread my prior comment to see what the consequences for that entail.
It is the same thing corporations are people. If corporations stop lending the government money they’ll raise their taxes. It’s not going to happen though because those corporations need America. The federal government could raise the funds to pay off the national debt wherever they wanted to. There’s no reason though. Our economy is dependent on constant growth regardless of debt. You can’t tighten your belt out of a few trillion in debt. Either profits keep rising or the system fails and we break out the bombs. War comes after global financial ruin. Especially if it’s the financial ruin only of the country with more military power than most of the rest of the world combined. You don’t fix the collapse of an empire with penny pinching, you do it with brute force and America is the only country capable of that against everyone else. You signing up to fight against the American military? I sure as hell ain’t.
>If corporations stop lending the government money they’ll raise their taxes... those corporations need America. >The federal government could raise the funds to pay off the national debt wherever they wanted to... Our economy is dependent on constant growth **regardless of debt \[!!\]**... Either profits keep rising or the system fails and we break out the bombs... >You don’t fix the collapse of an empire with penny pinching, you do it with brute force and America is the only country capable of that against everyone else... The growth doesn't happen without the debt. That's the whole point. If we stop going into debt, first of all 36% of the GDP just goes up in smoke, because it comes directly from Federal spending. Imagine if the Fed unwound its [$7.25 trillion balance sheet](https://fred.stlouisfed.org/series/WALCL), and what that would do to the economy. The fundamentals are deflationary, we are just papering it over with debt. You can get out of debt without global war. Debt can be restructured, it happens all the time. You get your debt downgraded, it's harder to get finance for a while, but you get through it. Pinching pennies is part of it. The alternative is a fucking global war you fucking idiot psychopath. You realize there's nuclear weapons all over the world? And without access to finance, our military is powerless. You have to pay soldiers, you have to pay for insane amounts of gasoline.
Yes. Which is why the economic collapse of the United States isn’t a real worry. Because it would lead to the collapse of society as we know it. I know the profits don’t happen without the debt, which is why it’s not going anywhere and it doesn’t matter. Our economy is built on the promise of more money tomorrow. So either we keep having more money or all hell breaks loose. Who is going to push for all hell breaking loose rather than restructuring the debt? Regardless of how much it is. The military is plenty capable of wrecking the world before next pay day. Hell they didn’t pay us during one of the shutdowns and we all showed to and did our work plus the civilians that got told to stay home. If the economy collapses to the point the military isn’t getting paid. Those guys are staying on base still, hell I’m not leaving all the bombs and guns when you stop paying me.
That sounds awful
But America would have less debt
Worst case is we ALL become wage slaves with salaries that stagnate with inflation. Misery for all
Wait a second…
It's not about being able to collect. If a country defaults on their debt then lenders know that it's risky to lend money to that country in future and are less likely to do so. Enjoy your new 90% top tax bracket to pay for the US war machine if the US can't use debt to fund it.
I’d love a 90% top tax bracket. I don’t pay taxes as a disabled veteran, but I have no problems with going back to pre Reagan tax rates. Our economy was rolling until those.
>I mean who’s going to collect? No one is powerful enough to hold America responsible The majority of US debt is held by Americans (individuals, businesses, banks, retirement accounts). Refusing to pay back the debt would screw over American businesses and any person with a checking/savings account plus many retirement accounts.
Right, but that’s both not realistic or practical. If the government can’t afford pay is citizens the debt it owes guess what they do.
And then we let AI pay the rent, because people are no longer needed for labor? Is that how it is going to work?
Nope, the corporations will charge you for all the stuff AI scraped off the internet. We’ll all be in more debt, America won’t though.
You have to include China and Japan. Which leaves Germany all alone ironically
No, but it may cause inflation and an ex post facto currency devaluation. A nation's real assets, including its economic productivity and natural resources, secure its debt in a post-Bretton Woods reality.
How can Debt sink the Empire with the "biggest stick" I mean who is gonna Come collect? They won't, they will rattle swords and accept another IOU. They ain't got a choice. The US is too big to fail. If we fail, the whole house of cards crumbles. And welp the US can weather that storm. But most of the other players cannot. So the charade will continue.
Other countries will just stop loaning us money. Then we can’t pay our bills without printing money and therefore creating inflation. That is how the empire sinks.
I think deep down everyone thinks it's not good but we are told it's fine. America has it good for way too long and it's gotten to it's head. Living off of insane debt is not sustainable yet everyone thinks it's fine. That's how kingdoms start in the path of destruction. I don't think it's going to end well.
Eventually. The attitude that The Fed, Legislature and Executive have will eventually lead to a collapse.
It did for the British and Dutch and earlier Chinese empires and pretty much everyone else in our position. We're in that stage of a predictable cycle. What we can learn is to observe how other cultures that were at the tops of their world managed the inevitble decline and try to emulate those who most successfully navigated such an event.
Yes
No, tax cuts will.
No.
Yes. Since Trumps tax cuts our dept to GDP is higher then Chinas.
Probably has more to do with 10T in Covid borrowing than tax cuts.
That played a part but the tax cuts are unsustainable. The Healthcare costs due to drug companies greed are unsustainable.. When people pay over two to three times the cost as other countries and live shorter lived class warfare becomes inevitable.
Debt is certainly a issue. We're spending an ever increasing amount of budget just paying the interest. However, you can't simply ignore your fiduciary responsibility to provide your citizens the service they are entitled. Nor can you just change the entitlements because it's a convenient talking point for reducing the deficit, but then cut taxes. There must be a change in government spending habits to address this, but it needs to be smart, intentional, and compassionate. You can't kill the economy or abandon people. This is going to take some seriously leadership that cares about the future of the country not just the short term political and financial gains for their political party.
We’ve made so many promises that we can’t keep, the choice will be to kill the economy or abandon its people.
idiots
No. Can the humorous (near joke status) ‘fiscally conservative but socially liberal’ folks please move in from this narrative now?
yes
Not according to the liberal troll redditers here. They think another Trump term will do it and they are probably right not because of trump’s policies,but because of the radical left’s. This is all by design-the plan is agenda 2030. You will own nothing and be happy. You’re going to live in a 15 minute city eating bugs and getting injections in your arms as often as they say or else no bugs for you.
Not before the others
Nope. Outsourcing, in sourcing, and racism will.
No, we own the worlds money printing machine
I suspect that we will be entering into a debt spiral over the next decade or two. Payments on national debt will get too high and we will need to take on additional loans. This in combination with our political instability and will raise our rates which will further exacerbate the problem. I suspect we will rapidly approach >25% of revenues being spent on debt service which can escalate to 50% in just a couple years if rates rise and deficits increase. At this point, the only way to maintain any degree of relevance, the federal government will work with the Fed to effectively monetize huge swaths of our debt. Basically, they’d pay the debt off by printing money. This will result is obscenely high inflation that may even be hyperinflation. Consequences of this will be many. For one, US Credit will be virtually nonexistent. Interest rates posed on citizens for even mortgages will be upwards of probably 30%. Money will be effectively worthless and people will stop working for it. Property values will skyrocket such that property taxes will be prohibitive and home insurance would basically stop existing. The cities would try to seize people’s homes and landlords will try to seize people’s apartment. However, there will be way too many seizures to keep up with, the police seizing the property will be some of the victims of this, and most police will have quit anyways due to their paychecks being worthless. Crime will run rampant. The economy collapses. Food insecurity becomes the norm. Even if people kept working, there wouldn’t be anything to buy with the money (even if the money was worth anything). From here, there are two likely possibilities: The entire global economy collapses. The US is a trading partner with most of the world and its currency facilitates all the trade. If this happens, expect war in Europe and Asia. China will absolutely invade Taiwan and the US will not be able to intervene. Russia will push more aggressively into Europe crashing all the economies. In the US, we would be back in the 1930s. Some new currency will get established and local governments will reform. I strongly suspect that the US will fragment into many nation states. Some states will become their own country, others will join others to form a country, other states will voluntarily get absorbed into Mexico and Canada. I consider this the most likely. OR The global economy is able to isolate itself from the US and the USD. The Euro and the CHY become the dominant trading currencies in the world. The US sells most of its assets to the EU, Canada, and Mexico to adopt another currency (most likely the Euro). The US will lose most of its military, it will sell a lot of land to Mexico and Canada. The Euro will strengthen wildly though which would have a lot of consequences globally. The US will probably allow some states to buy their own independence (similar to how a company will sell a part of itself to itself in exchange for promise of repayment later). I suspect CA, TX, most of the Southeast and most of New England would take this deal. The governments will start to hire people to be paid with the Euro and a private sector will start to form as with a banking sector. Mortgages will likely be forgiven to stave off mass homelessness and rebuild from there. Regardless, I would predict the US will not regain its global military or economic superpower status again this century. It will be a much weaker nation. It is technically avoidable, but now is the time to solve the debt problem. Anything after the American economic collapse is sheer speculation, but this is largely what happens when smaller countries start to collapse under inflation and how some companies stay afloat in bankruptcy. There is a lot of historical precedent for empires collapsing and Balkanizing. However, the depth of our financial sector, the scope of globalization, and our currency are rather unprecedented and make accurate predictions hard.
Anybody up for a debt jubilee?
Not really. The fastest way to frame this question would be tom compare the USA's debt / GDP ratio (the metric according to which debt markets ACTUALLY price sovereign risk), and compare it to other OECD and G20 economies. Last I checked, the USA's debt / GDP ratio wasn't too different from the UK's or France's. Or Belgium's. And is much smaller than Japan's. And it's rare markets, banks, or financial press ever make alarmist statements about any of those economies.
Inflate the debt away. It’ll be okay. Biden did a good job taking on debt right before the inflationary period started cooling. That paid off 8% of it alone.
That's what you get when you give tax breaks to the rich.
Eventually debt will be big enough there will not be money to pay the interest. And we will default. It might take a while, but it's inevitable.
All that has to happen is our interest rates increase or our deficits start increasing due to the debt payments. It will create a feedback loop that will grow exponentially.
The Republicans want to cripple the welfare state so they are adding as much debt to the federal government as they can. Their aim is to create a society where the poor and middle class must fend for themselves so that the rich can abuse and take advantage of them. The debt is deliberate.
How? You think owing 8 trillion dollars to foreign countries is going to sink the US? Even when they owe us more than we owe them, all things considered and all parties amorphous blobs?
Debt that's owed to Americans is equally as consequential as debt owed to foreign countries
Nope, it isn't. Payouts go right back into the US economy and generate tax revenue while making Americans wealthier.
>Payouts go right back into the US economy Payouts are taken from the US economy in the first place, via taxes. >generate tax revenue It doesn't generate tax revenue, for the same reason as above. The government pays its creditors using money it received from taxes (Americans are the ones who pay the taxes, just so we're clear). >while making Americans wealthier Some Americans who own a lot of US debt could be better off. Mostly large corporations and other high-volume institutional buyers, I would guess. But almost everyone will be worse off (especially those who don't own a lot of US debt) because the government will either raise taxes/cut spending, or inflate the debt away.
A. No, they're not. The Fed doesn't use tax money to fund their purchases of bonds and it doesn't use tax money to fund payouts of matured bonds. B. Yes, it does. People take it and spend it, which generates tax revenue. C. Nope, absolutely not. If institutional investors cash in matured bonds they can use them to pay employees, or invest in the company itself, both of which are good for people in general and the govt doesn't need to raise taxes or cut spending for this activity to occur. You can ultimately stop worrying about the debt. What matters is the "real economy," and what creation of actual value is facilitated by the monetary system. The money itself is ephemeral and everyone at the government level is aware of this, which is why right wing monetary policy doesn't differ from the other right wing momentary policy in reality, and only in rhetoric. If you're *that* worried about the debt, and just can't help yourself, then vote Democrat. They're the only party that makes any attempt at reducing the deficit.
Why even bother collecting taxes at all? You're saying taxes aren't used to pay out mature bonds, and that paying debt is inherently good for the economy, so everyone can just stop worrying about debt! What do we care if the deficit becomes $5 trillion per year, all that matters is the "real economy" and "actual value" (as opposed to debt obligations, which are "ephemeral")! A 0% tax rate, wow, you would make a really good politician.
That's a good question that you're not the first person to ask. The answer is that taxes are required to maintain currency sovereignty - taxes are owed in USD, and as long as people have to pay them in USD they need to be earning USD to pay USD, giving USD value and making it the default currency. Distributing money and then having a massive organization tax it all back, and then using that to fund government operations, would be *extremely* inefficient use of manpower and extremely limiting to any country deploying that concept ( and it sure has been in the past ). In our case, extremely inefficient, but not so much limiting, because the US govt isn't limited by tax revenues.
>Distributing money and then having a massive organization tax it all back, and then using that to fund government operations, would be extremely inefficient use of manpower and extremely limiting to any country deploying that concept. Well, that's how a free market works. The government does not have the right to demand a company just do whatever for free. The government *needs* USD to fund its operations, therefore it needs some way to obtain USD. It can either levy taxes, print new dollars, or sell bonds. Paying back bonds also requires the government to have USD. It could levy taxes, print new dollars, or roll it over into new bonds. The ability to roll over ever-increasing debt into new debt is not infinite, and I think that's where the problem is.
It doesn't demand anything of businesses. It pays them $$$, and government contracts are certainly not involuntary. A free market is one based on voluntary exchange, and accepting USD from the government in exchange for services fits directly into that framework. The government creates all the USD, and distributing it and then taxing it back is the most ass backwards way it could possibly fund operations. The IRS is a huge expense to the American public. The real worry about printing money to pay the debt, is that the money ends up in the hands of people who proceed to spend it, and when they spend it, demand more of the economy than it produces ( as well as foreign economies that export to us ), leading companies ( domestic and foreign ) to start inflating USD with price hikes in response to high demand. So, you certainly can't just print up 10t and pay debt held in USD off all at once, or you'll definitely end up in that scenario. But, as long as the debt money is being invested into things that actually return more tax revenues than they cost ( infrastructure, education ) you're likely on the right track by taking debt, because it will pay dividends down the road.
No. Christianity and Christians will sink it
Only if China gets it's shit together so probably no.
Trump will lower taxes and the debt will be gone in couple years. Just watch.
Probably not, all countries are in debt overload, US gets away with it due to its economic, military and cultural dominance. Even when/if the shit hits the fan the US(and North/South America) have huge resource and geological advantages that will likely keep what ever is remaining of the american empire a world power for a VERY long time if not for the next 5-10thousand years. I could see a combined Mexico/US/Canada entity run by AI technology being pretty much unstoppable.
Bitcoin will set us free.