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It’s $75 Billion not $75 million. The debt has grown so high now that 15% of all US government revenues go towards interest on the debt. Up from 7% when I was

It’s $75 Billion not $75 million. The debt has grown so high now that 15% of all US government revenues go towards interest on the debt. Up from 7% when I was in college. How high does the debt have to grow before the country and government collapse? Better to advise the World Bank and the IMF to loan them money if that’s not happening already..

bandyaboot 3y ago
$75 billion is about 2% of the debt increase since the war began and most of that hasn’t come in a form that would have affected the debt number yet. Some of it can’t properly be said to affect the debt at all such as giving them military equipment for which we had already allocated funds to replace. I won’t bother responding to anything beyond your first sentence since it doesn’t appear to be a response to anything I wrote.
astrange 3y ago
> How high does the debt have to grow before the country and government collapse? The absolute amount doesn't necessarily matter, because if you own the bonds then you're paying the debt to yourself. Other factors are a) who owns them b) what the interest rate is c) what currency they're in. The usual problem for smaller countries is when they owe debt in foreign currencies. Also note that long term interest rates would be very high if the market thought there was a hyperinflation risk, and they aren't.
csomar 3y ago
Some bandits says you can indefinitely print money. It's funny that even after this inflation phase, some people still believe that the solution is to "spend more" on "everything". I guess we are bound to repeat history.
rswail 3y ago
The debt is money owed by the US to itself and foreign buyers of its bonds. The debt is payable in US dollars. The US has control over how much supply of US dollars there is. The more US dollars, the "cheaper" they are in a foreign currency, but also the lower the value of a US bond in the hands of someone overseas. So the current US national debt is held mostly by US people. $7T is currently held overseas. So out of the ~$25T, $7T will be paid back in US dollars to overseas holders. The rest is paid to US domestic holders. So that's 7/25 * 15 = 4.2% being paid outside of the US, the rest is effectively increasing the money supply inside the US. The debt has to grow until people stop buying US treasuries when they are issued. Given that the majority of world trade is denominated in US dollars and that US Treasuries are effectively treated as the "risk free" base, and that the US debt is at ~122% of US GDP, that's just over a year's worth of US "income" to pay it back. The US federal government share of the economy is ~24% (down from 30% at the height of COVID). As a comparison, Japan's national debt is $9.2T (converted from yen) and is 263% of GDP. Its government share of the economy is ~21%.
- webninja 3y ago
  GDP is not “income”. Taxes are income and are effectively synonymous with revenue since there’s not much revenue outside of taxes. Revenue is a significantly lower number.
  - dragonwriter 3y ago
    > GDP is not “income”. GDP is literally the primary national income measure. Its not government revenue, but government revenue is largely a choice within parameters set by, more than anything else, national income.
    - webninja 3y ago
      No, GDP is Gross Domestic Product. It’s a measure of economic activity, not income. An analogy on a smaller scale: Visa’s GDP is the sum of all transactions that occur on its network. You wouldn’t call any of that income except the sliver siphoned off as interchange fees. To make matters worse, GDP numbers are generally one of the most inaccurate and untrustworthy numbers since it’s set for political reasons. It’s not possible to measure all of the transactions that occur within a country since a large amount occurs offline and are unrecorded.
      - dragonwriter 3y ago
        > > GDP is literally the primary national income measure. > No, GDP is Gross Domestic Product. Congratulations, you've expanded the initialism. Now what are the group of economic measures including GDP, GNP, GNI, NNI, and a few others called as a group, because of what they all measure with slightly different inclusions and exclusions?
        dllthomas 3y ago
        The point might be that GDP is not the income of any individual entity, however construed.

bandyaboot 3y ago

$75 billion is about 2% of the debt increase since the war began and most of that hasn’t come in a form that would have affected the debt number yet. Some of it can’t properly be said to affect the debt at all such as giving them military equipment for which we had already allocated funds to replace. I won’t bother responding to anything beyond your first sentence since it doesn’t appear to be a response to anything I wrote.

astrange 3y ago

> How high does the debt have to grow before the country and government collapse? The absolute amount doesn't necessarily matter, because if you own the bonds then you're paying the debt to yourself. Other factors are a) who owns them b) what the interest rate is c) what currency they're in. The usual problem for smaller countries is when they owe debt in foreign currencies. Also note that long term interest rates would be very high if the market thought there was a hyperinflation risk, and they aren't.

csomar 3y ago

Some bandits says you can indefinitely print money. It's funny that even after this inflation phase, some people still believe that the solution is to "spend more" on "everything". I guess we are bound to repeat history.

rswail 3y ago

The debt is money owed by the US to itself and foreign buyers of its bonds. The debt is payable in US dollars. The US has control over how much supply of US dollars there is. The more US dollars, the "cheaper" they are in a foreign currency, but also the lower the value of a US bond in the hands of someone overseas. So the current US national debt is held mostly by US people. $7T is currently held overseas. So out of the ~$25T, $7T will be paid back in US dollars to overseas holders. The rest is paid to US domestic holders. So that's 7/25 * 15 = 4.2% being paid outside of the US, the rest is effectively increasing the money supply inside the US. The debt has to grow until people stop buying US treasuries when they are issued. Given that the majority of world trade is denominated in US dollars and that US Treasuries are effectively treated as the "risk free" base, and that the US debt is at ~122% of US GDP, that's just over a year's worth of US "income" to pay it back. The US federal government share of the economy is ~24% (down from 30% at the height of COVID). As a comparison, Japan's national debt is $9.2T (converted from yen) and is 263% of GDP. Its government share of the economy is ~21%.

webninja 3y ago
GDP is not “income”. Taxes are income and are effectively synonymous with revenue since there’s not much revenue outside of taxes. Revenue is a significantly lower number.
- dragonwriter 3y ago
  > GDP is not “income”. GDP is literally the primary national income measure. Its not government revenue, but government revenue is largely a choice within parameters set by, more than anything else, national income.
  - webninja 3y ago
    No, GDP is Gross Domestic Product. It’s a measure of economic activity, not income. An analogy on a smaller scale: Visa’s GDP is the sum of all transactions that occur on its network. You wouldn’t call any of that income except the sliver siphoned off as interchange fees. To make matters worse, GDP numbers are generally one of the most inaccurate and untrustworthy numbers since it’s set for political reasons. It’s not possible to measure all of the transactions that occur within a country since a large amount occurs offline and are unrecorded.
    - dragonwriter 3y ago
      > > GDP is literally the primary national income measure. > No, GDP is Gross Domestic Product. Congratulations, you've expanded the initialism. Now what are the group of economic measures including GDP, GNP, GNI, NNI, and a few others called as a group, because of what they all measure with slightly different inclusions and exclusions?
      - dllthomas 3y ago
        The point might be that GDP is not the income of any individual entity, however construed.