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Note that most government debt is owned by taxpayers in one form or another though. China and Japan are very large foreign owners though.
by bcrosby95 7y ago
Note that most government debt is owned by taxpayers in one form or another though. China and Japan are very large foreign owners though.
- dmillar 7y agoJapan is actually the largest, fwiw. These Fed programs are being financed by debt spending, not tax increases. So even if some of this debt is held by US tax payers, it's not at their expense. They're getting paid interest.
- dtwest 7y agoDebt spending tends to turn into tax increases if you actually plan on paying the money back
- outside1234 7y agoThe end game here is inflation. Which, in the long run, will also make the stock market, and their options increase, as revenue and profit inflate. But not in the short term.
- drdec 7y agoExcept that the Fed is buying bonds that pay a higher rate that they borrow at (U.S. Treasury rate). So unless there is a lot of defaulting, they should be fine. It's like they are mortgaging the White House at 0.25% and buying bonds that pay 4%.
- thephyber 7y agoNot necessarily. If the economy grows faster than recent history, a constant tax rate brings in more revenue. Also worth looking at the last time the USA completely paid off its government debt. > On January 8, 1835, president Andrew Jackson paid off the entire national debt, the only time in U.S. history that has been accomplished. [1] [1] https://en.wikipedia.org/wiki/History_of_the_United_States_public_debt https://en.wikipedia.org/wiki/History_of_the_United_States_p...
- dtwest 6y agoYes, well actually if the economy grows at all, a constant tax rate brings in more revenue, while we tend to spend more too. But I agree it is theoretically possible. In Andrew Jackson's case they also raised taxes: https://en.wikipedia.org/wiki/Tariff_of_Abominations https://en.wikipedia.org/wiki/Tariff_of_Abominations