The national debt surpassed a record $39 trillion on Wednesday, a milestone that comes just weeks into the U.S.-Israeli war in Iran.
The unprecedented figure highlights competing administration priorities, from passing a massive tax law and boosting defense spending and immigration enforcement to chipping away at the debt itself — the latter of which Donald Trump promised to do as both a candidate and as president.
Abandon the Board of Peace. Create the Board of War and Pedophilia. Charge one trillion dollars to be a member. Get 39 like-minded countries to join. BOOM! Problem solved. /s
Part of whatever plan the Republicans had in store.
This will all somehow be the next president-not-Trump’s fault. Somehow.
They don’t plan to give up the presidency, the project 2025 crowd.
Btw the US spend 6.8 trillion (!) dollars from 1976 to 2007 protecting Hormuz, mostly from Iran.
12 billions in the current war, which means that in comparison to the time period between 1976 and 2007, the US is spending around the same amount per day.
I also found mentions of the cost of protection between 2007 and 2010 to be 1,2 trillion dollars, but no sources.
https://www.sciencedirect.com/science/article/abs/pii/S0301421510000194
What would happen if the US defaulted?
We are going to find out. After they max out borrowing, presuming they succeed in fixing elections, and I don’t see what will stop them at this point, they will print money to pay treasury bills, and it will cause runaway inflation in a de facto default.
Like the European monarchies, always in debt, reeling from one crisis to the next, selling off profitable assets for money now losing money in the long term, not paying their soldiers, creditors. Killing their creditors if they can. Then watering down the currency, lowering the amount of precious metal, to pay creditors, which immediately caused inflation.
Fiat currency or no, the dollar will fail at some point with these clowns in charge, they are extracting everything they can from the federal government, that is their only reason for being.
It literally cannot. It prints the currency they owe debt in. Worst case is they print a shitload of money and devalue the USD heavily and lose its status as global reserve currency, but at this rate they’re heading that way anyways…
Why do people keep lending to them when the total loss of value is the most likely outcome?
Because the US is still the most trustworthy of the main currencies, like the Dutch we’ve never missed a payment. All other currencies are kind of tethered to the dollar in some ways.
Because goverment debt isn’t like household debt. They don’t go to the Bank of China or the Bank af America and apply for a few billion! The fed issues securities - fixed yield, fixed term bonds. Anybody is free to buy these securities and hence, the biggest holder of US gov debt is the US people, through investment funds, pensions and personal holdings. The fed promises to pay the holder the value of the security after the fixed term expires, as well as small dividend payments for the duration of the term. As the fed prints the money used to pay the bond, they are seen as a safe investment, a hedge against more volotile financial instruments.
As the other reply stated, gov debt isn’t necessarily detrimental, it’s an important tool for regulating the economy. If a government ‘borrows’ 5 billion but grows the economy by 7 billion, that’s sound economics.
When is the last time the US borrowed money to make or save money? Not in our lifetimes to any major degree. We are borrowing to pay expenses, to give tax breaks, to subsidize mega corporations.
Borrowing to make an interstate freight and passenger rail, roads that don’t have to be rebuilt, infrastructure that lasts, that would pay for itself. We are doing none of that. If anyone thinks we are to any large degree, check your sources for credibility.
Because so far the fed has remained independent, and national debt matters far less than most people think it does. Take a look at Japan - theoretically in debt WAY over their head, but the Bank of Japan is actually trillions of yen in the black and mostly invested in the Japanese economy, getting yields of 6-7% on their holdings far above their debt service. Their pension fund is a majority stakeholder in basically all internal infrastructure, and despite stagnant “growth”, Japan’s real wage growth is like 4-5% YOY.
As with anything economics, a single metric usually tells a bad story. Whether we like it or not, the US economy is pretty robust and even a moron like Trump can’t really kill it totally in 4 years without messing with the currency directly. The downfall will be long and drawn out.
Isn’t the whole fact Japan’s basically had a 0% interest rate been a massive bandaid on the global economy and with them actually removing that quickly fucking everything.
Uh, vaguely, yes. They’re essentially pinned to 0% because they need to get their inflation up, but that’s not really caused by their national debt. They’re definitely not in an enviable position overall, but their 260%+ debt:gdp ratio isn’t really why.
How did you get the impression that default is the most likely outcome? Borrowing costs for the US are likely to rise, but there isn’t any particular reason to expect outright default.
Because up until very recently that hasn’t been the most likely outcome. In fact, that change is so recent a lot of people still haven’t realized it yet.
the Debt:GDP ratio was 2.6x higher than it is now in 1980. Sure the GDP is flawed, but the U.S.'s issues are tied around wealth distribution, health, education, and the underlying bigotry being promoted by bad actors knowing it helps to keep the wealth distribution slanted in favor of the ultra rich, using it to exploit people into voting for stupid things out of false principles.
The rich folk need a monetary system to keep score in their funny game. Make the number go up.
