Milestone marks years of government spending that grew under both Donald Trump and Joe Biden
US debt reached $40tn for the first time on Wednesday, the US treasury department said, after the government deficit doubled over the last decade.
The treasury’s latest debt balance showed $40.047tn on Tuesday afternoon, the highest in US history.
The milestone marks years of government spending that grew under both Donald Trump and Joe Biden. During his first term, Trump approved $8.4tn worth of debt, with a huge chunk going to Covid-19 relief spending, while Biden approved $4.3tn worth of debt, according to the Committee for a Responsible Federal Budget.
Even if you own the money printer, you can effectively default if you print too much money. The result of overprinting devalues your own currency so much that it reaches insolvency.
Exhibit A:
In 2008 the government of Zimbabwe experience hyperinflation when the country tried to print piles of money to pay back its debts. Each subsequent printing devalued the currency even more until they were printing 1 Billion dollar notes.
Exhibit B:
Germany’s Weimar Republic in 1923, saddled by WWI payback debt, ran the money printer full blast devaluing the Reichsmark currency to the point of it being worthless. It included them printing the 500 million mark notes: