Economy 53,076 Posted July 9, 2023 Share Posted July 9, 2023 https://dailyhodl.com/2023/07/08/us-debt-explodes-by-865000000000-in-one-month-larger-than-finland-hong-kong-and-greeces-combined-gdp/ US debt has surpassed $32 Trillion crossing the threshold after a bad month with an especially high deficit of over $800B The US is comfortably in the club of Countries with a debt above 100% of GDP Link to post Share on other sites More sharing options...
Gohan 16,894 Posted July 9, 2023 Share Posted July 9, 2023 The question is, who are they in debt with if they rule the economy? tryna go ask Alice, tryna catch that rabbit Link to post Share on other sites More sharing options...
Quentin 6,890 Posted July 9, 2023 Share Posted July 9, 2023 One of my economy teachers told us that debt isn't a big deal as the more the country's GDP grows, the less the debts represent a hole in the finances Follow every rainbow till you find your dream Link to post Share on other sites More sharing options...
Emvee 8,858 Posted July 9, 2023 Share Posted July 9, 2023 Reminder that we need to stop giving tax cuts to the rich Link to post Share on other sites More sharing options...
Economy 53,076 Posted July 10, 2023 Author Share Posted July 10, 2023 1 hour ago, Quentin said: One of my economy teachers told us that debt isn't a big deal as the more the country's GDP grows, the less the debts represent a hole in the finances That's true if they grow in sync, like if the economy grows at least as fast as the debt... They are not growing in sync... The US debt has now surpassed way above 100% of GDP Link to post Share on other sites More sharing options...
Economy 53,076 Posted July 10, 2023 Author Share Posted July 10, 2023 1 hour ago, Cereza said: The question is, who are they in debt with if they rule the economy? They aren't in debt to any 1 specific entity it's a mix of many Like most other Countries the debt mix is to their Central Banks, Pension Funds, Financial Institutions and individual investors who buy bonds Link to post Share on other sites More sharing options...
Guest Posted July 10, 2023 Share Posted July 10, 2023 Link to post Share on other sites More sharing options...
Puddin 1,215 Posted July 10, 2023 Share Posted July 10, 2023 Same!! Link to post Share on other sites More sharing options...
Borisapillar 10,166 Posted July 10, 2023 Share Posted July 10, 2023 bitch me too the **** Link to post Share on other sites More sharing options...
LateToCult 42,098 Posted July 10, 2023 Share Posted July 10, 2023 Might as well round it up to $35T because these numbers are so big they mean nothing to me. Link to post Share on other sites More sharing options...
Economy 53,076 Posted July 10, 2023 Author Share Posted July 10, 2023 25 minutes ago, LateToCult said: Might as well round it up to $35T because these numbers are so big they mean nothing to me. It's crazy The US doesn't have the highest debt in the world but I think they are either top 10 or top 20 relative to GDP (economy size) so still pretty bad Also despite the rising opinion and rehtoric by some that debt doesn't really matter, that's simply not true... As it keeps growing it takes more and more capital to refinance bonds as they mature and pay the interest and a higher percentage of the entire Nations wealth has to be used to keep the ponzy scheme going You then have a few possible outcomes once you start to hit your limit - You have to suck up a lot of investment capital towards debt refinancing which steals a lot of money that could be deployed to more productive investments which starts to make your economy less productive or stagnate... - you could print a lot of money to keep up with it and not let private sector finance it all to steal capital but then you get a lot of inflation - you default on payments (thats arguably the worst cuz markets loose all confidence, interest rates surge and the financial system totally freezes and collapses) - you go into serious austerity via budget cuts, tax hikes or a combination of the two None of those 4 options (or a combination of more than one) are pleased to go thru but any debt above a certain threshold eventually results in that for a Nation What is the threshold that would cause this for the United States? That's hard to answer. Were already higher than some thought we could handle but the reality is the US probably can't still handle Trillions more but how much exactly is hard to say. But there is a limit and the US is not immune to it. Link to post Share on other sites More sharing options...
AsleepOnTheCeiling 6,998 Posted July 10, 2023 Share Posted July 10, 2023 5 hours ago, Cereza said: The question is, who are they in debt with if they rule the economy? Highest amount of debt belongs to bonds I believe Link to post Share on other sites More sharing options...
HEARTSTOP 3,160 Posted July 10, 2023 Share Posted July 10, 2023 If you're never gonna pay it, debt means nothing. They keep spending like they owe 0$, and consequences are minimal when the real way to get it back is...well, actually, how can you make them pay? IDGAF Link to post Share on other sites More sharing options...
AnglerfishbraBENUS 5,734 Posted July 10, 2023 Share Posted July 10, 2023 i asked AI and it helped answer some questions: As for who the U.S. owes, the debt is held by a variety of entities, including both domestic and foreign investors. The largest holders of U.S. debt are often domestic investors such as individuals, mutual funds, pension funds, and state and local governments. These investors purchase U.S. Treasury securities, which are considered safe investments due to the trust in the stability of the U.S. government. Foreign countries also hold a significant amount of U.S. debt. Countries like China and Japan have been notable holders of U.S. Treasury securities. However, it's worth noting that the composition of foreign holders can change over time, as countries adjust their investment strategies and portfolio allocations. It's important to highlight that holding U.S. debt is generally seen as a safe and reliable investment due to the perceived stability of the U.S. economy and the belief that the U.S. government will honor its debt obligations. Link to post Share on other sites More sharing options...
Economy 53,076 Posted July 10, 2023 Author Share Posted July 10, 2023 17 hours ago, HEARTSTOP said: If you're never gonna pay it, debt means nothing. They keep spending like they owe 0$, and consequences are minimal when the real way to get it back is...well, actually, how can you make them pay? Countries very rarely default on debt payments actually. That's why it's such a big deal when they do And it does mean something if it gets so high that they cannot refinance without interest rates either surging or money printing going bezerk I sense based on what u wrote that u perceive government debt to be like a mortgage to a bank like many ppl do, or a lump sum to another Country That's not how government debt work. They sell bonds which involve paying back the lender plus interest. When a bond matures they pay back that bond with new borrowed money by selling another bond... The US (and most Countries) may not pay back debt in the sense of reducing the balance because they are constantly paying back debt with new debt, but they do always make payments on time These payments may be difficult to make tho if the amount of money they need to raise by bonds becomes so high that the market doesnt have the money available for the government's needs. Interest rates then surge to try to attract more lenders (which affects other interest rates in market like mortgages) or they must print causing inflation Either way, a debt higher than you can sustain becomes problematic. Despite what some say that debt doesn't matter if you own your own currency, that's simply not true. It just means your debt tolerance is higher than say Greece who did not control their own currency. But a limit still exists. But it's debatable where that limit stands because there's so many variables Link to post Share on other sites More sharing options...
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