The national debt belongs to someone, and for them is an asset. The debt is a source of income for some, and when they spend that income they are spurring the e

The national debt belongs to someone, and for them is an asset. The debt is a source of income for some, and when they spend that income they are spurring the economy. For those unable to print their own money, there is a definite limit on how much debt that one can carry, though the total amount of debt that can be carried varies based on the prevailing interest rates. On December 19, 1980, the prime rate hit 21.50% [source: 1], and in such situations it is difficult to run up large debts. Right now the prime rate is just over 5%, which makes large debts easier to manage than 39 years ago. However, the USA government can print as much money as it wants to, and in that sense it can fund infinite debt. It could issue hundreds of trillions of dollars of debt and then print the money to pay the debt. The result would be inflation. For that reason, economists often point out that the only limit on USA government debt is how much inflation people are willing to tolerate. Since inflation has been in decline for the last 36 years, the presumption is that the USA government could print a lot more money, and cover a lot more debt, than it has so far. [1] http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm http://www.fedprimerate.com/wall_street_journal_prime_rate_h...