4 ms·
Other than inflation I’m not sure how the U.S. maintains let alone pays off their > $27.5 trillion in debt. Considering total tax revenue is about $3.5 trillion
by 300bps 6y ago
Other than inflation I’m not sure how the U.S. maintains let alone pays off their > $27.5 trillion in debt. Considering total tax revenue is about $3.5 trillion per year, even at ridiculously low interest rates we are spending 10% of total revenue on interest.
If interest rates come anywhere near historical norms we will be spending all revenue just to pay interest.
- 542458 6y ago"Can the US pay it's debt?" is the wrong question. The US can pay off any amount of debt, because their debt is measured in USD and congress can issue new USD as needed. "How does the debt actually effect the economy? (Does it?)" and "What is the long-term impact of various debt-maintenance strategies?" and "Will political deadlocks prevent effective management of the debt?" (among many others) are better questions.
- lifty 6y agoThe US Gov will never have an issue paying their debt because they are sovereign over the currency they use (USD). Furthermore, they have an extra advantage because the USD is the most popular reserve currency and because of this demand around the world, it's easier to maintain its value or relative strength to other currencies. That being said, long term it's not looking good for the USD. If you check the DXY index, the USD has been trending lower against a basket of currencies, and the FED had to buy a lot of treasury bills in 2020, because of lower demand from other entities. Another bad thing for the USD is the long term liabilities of the US Gov, which will only be able to be satisfied by printing dollars. (https://www.youtube.com/watch?v=YpgfIfD_cRs https://www.youtube.com/watch?v=YpgfIfD_cRs)