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.
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.