What US can do with its dept? Genuine question.

[Darker45]

~snip~

~snip~

We can generalize that everybody has debts, rich and poor alike. As one's wealth grows so are his/her expenses. I think this is basically the same with countries. When a country gets rich, it can afford to do and provide a lot of things. That means its expenses also grow. It can provide quality and free education, healthcare, and so on. It can build all kinds of infrastructures. It can provide incentives to businesses and to its citizens. It can continuously upgrade its military. It can even spend much on other countries.

In other words, there's always a reason to spend more than what's earned. So, there's debt. To rich economies, add to it the fact that they are highly capable of borrowing. They can have massive amounts of debts because of their paying capacity. So, they have the luxury to borrow. But the economy isn't strong all the time. Sometimes it weakens. It fluctuates. And then there are irresponsible administrations that just squander money mindlessly. The end will always be a ballooning debt.

Debt, debt, debt - it's a word that connects with everyone, doesn’t it? It appears to accompany everyone, rich or poor, nation or individual. You make a very compelling and, in many cases, correct point about the relationship between rising wealth and rising costs. Is it unavoidable that prosperity increases expenditure and debt?

Rich economies can borrow because they pay well. They spend, construct, give. Now, is it not risky to assume that spending more than earned is normal? Countries, especially affluent ones, can acquire large debts due to their ability to repay them. Should they always go that way?

Economies vary, and governments can waste money without planning. But shouldn't a strong economy operate with financial prudence, making sure its debts are sustainable and used to boost growth? A tricky balance, right? Balance spending, debt, and giving/wasting.

It's probably not entirely unavoidable, but rich and poor nations and individuals alike are more inclined to borrow than not. To a poor country, to support its needs. To a rich country, to support its dreams.

If a country is debt-free, it can plan to do a whole lot of things. It can be generous in providing tax exemptions to investors. It can provide a lot of free services to its citizens. Hell, it can even try to be powerful and build up a strong and highly-equipped military and join other wars and bully other countries. It can assert influence within the region or the entire world by giving out aids and assistance. It can support other countries' projects and programs.

If you're a president, you probably don't care that your country is debt-free; you care that you left grand projects and programs that make people fondly remember you. Every president's ulterior goal is to build a selfish legacy.

It's indeed tricky to create balance. Regardless, they all borrow. Even the countries with the highest GDP per capita, those that have huge reserves; they all have debts. Luxembourg, Singapore, Ireland, Norway, Qatar all have debts.

[1714744437]

1714744437

[1714744437]

1714744437

[1714744437]

1714744437

[1714744437]

1714744437

[dothebeats]

The United States is a power country, no matter how big the debt is they will be fine. Various smaller countries borrows money all the time, it's nothing new. Besides, what they mostly do is pay off the debt that was possibly due after 10-20 years then borrow again to use it to make more money like investments and projects. As for the situation of the United States, perhaps they will do exactly what they did during the COVID-19 pandemic-- print more money and let their currency take a bit of hit. Will it affect them? Sure, but will it cause their downfall? Certainly not. Hence, if we're talking about huge debt and just how bad it might get for a country we should discuss about developing countries instead of a power country like the United States.

They will not default even if the debt figure increases to millions and trillions of dollars because they control the world's money printing machine and they always use their enormous power to export inflation to the world. But that doesn't mean it could never happen, if their position of power were threatened and overthrown their downfall would be swift. They are not the only empire that exists in this world that never collapses, let's see how long the American empire can last. Everything has a life cycle and the American empire is no exception.

I don't know and I'm not sure where in my reply I said that United States will never fall or the possibility is non-existent. Perhaps you have comprehended it wrongly. All I am saying is it will take more than a bit of currency shift for the United States to fall. Of course there's always the lingering possibility that US will fall, that it will one day lose its dominance over the rest of the world but will it happen overnight? Possibly not, it will take a lot for that to happen. Perhaps you should read my reply and the original post again to see that we're talking about debt here and how it may affect United States and not any outside factors.

[panganib999]

We all know that US borrowing heavily. There are a lot of information on US debt on the Internet. Just to make it short, I will ask few questions:

What do you think, how this situation will be resolved? What did happen to any other nations who had huge dept in history? Is there any ways offered by economists to resolve the situation?

I will give the answer based on my experience, our country was on the edge of declaring default, we consider it already defaulted but till now, our government has not declared that openly (publicly). Well, we are on the edge of default because of huge debts taken from all over the world. We took most of the debt from the IMF and the debt that we had taken is now less than the interest rate that is on that principal amount.

Overall, the thing is we saved ourselves from this by taking more loans (hehe) and we used those loans not to enhance productivity and provide more jobs instead we used that money to open more schemes that are totally useless.

Well, leave this discussion and the answer to your queries will be that the US has big icons and legends, companies, big tycoons, etc. The most rich people and companies are there. People of the US are so rich and the US has resources that they have gained access to using their democracy slogan (hehe  ), I doubt if there is any need to worry about this thing, as debt can be dealt in a blink of an eye if they really want to solve it.

Don't they also do stupid stuff like taking out a loan to pay off an existing one? I've seen them do this one too many times and if the IMF presses them for this loan they might do this again. Plus what of the government shutdown? Is that because of the debt ceiling not being increased in due time? What's going to happen to the millions of US citizens that are under the government's payroll? And why of all departments is the congress still able to take their paycheck as if they aren't the ones who are at fault here? What's going in America?

Like seriously concerned about what's going on cause I have a few relatives there, and of course the impending recession and economic crash that they will carry with them once things go south.

[ChiBitCTy]

I hope that everyone knows that EVERY single country on this planet has plenty of debt to it's name.  Yes, of course the United States has the highest debt number globally, but there's also a reason behind that..the US is the worlds strongest economy, and therefore are able to pay their debt better than anyone else can, so this is why they are able to continue to build their debt. 

Now I'm not saying this isn't a problem, because it is..but just pointing out why it's so high compared to the rest of the globe.  How are we going to fix this? There's many ways, but the way I see it, the problems are just going to keep getting worse by those whom don't truly care, and only truly care about lining their own pockets...issues then left for future generations.

[Gyfts]

Ways to reduce debt:

1.) Raise taxes
2.) Raise GDP
3.) Reduce spending.

Politically inconvenient to do #1 and #3, so the U.S. could try to grow the economy and generate more revenue.

But as revenue increases, so does the spending. It's almost a never ending cycle.

What can the U.S. do about its debt, then? The answer is not much.

[Renampun]

We all know that US borrowing heavily. There are a lot of information on US debt on the Internet. Just to make it short, I will ask few questions:

What do you think, how this situation will be resolved? What did happen to any other nations who had huge dept in history? Is there any ways offered by economists to resolve the situation?

Is there a country in the world that has no debt? if you search for it on the internet then you will find it difficult to find a country that is debt free, debts incurred by countries are not like debts incurred by individuals, usually the country's debt comes from exports and imports cmiiw and each country is not forced to pay directly (pay off) their debts in full, that is the reason why every government requires citizens to pay a certain amount of taxes (discussing a country's debt is actually very complex), and bankrupt countries are usually countries whose governments have failed to resolve inflation, deflation and their debts.

[South Park]

We all know that US borrowing heavily. There are a lot of information on US debt on the Internet. Just to make it short, I will ask few questions:

What do you think, how this situation will be resolved? What did happen to any other nations who had huge dept in history? Is there any ways offered by economists to resolve the situation?

Is there a country in the world that has no debt? if you search for it on the internet then you will find it difficult to find a country that is debt free, debts incurred by countries are not like debts incurred by individuals, usually the country's debt comes from exports and imports cmiiw and each country is not forced to pay directly (pay off) their debts in full, that is the reason why every government requires citizens to pay a certain amount of taxes (discussing a country's debt is actually very complex), and bankrupt countries are usually countries whose governments have failed to resolve inflation, deflation and their debts.

I think we can understand that countries must have some level of debt in order to function as unlike a person which may only need to deal with a single currency, governments have to deal with several of them and all kind of regulations, so it makes sense for them to do so, however what is a healthy level of debt for governments which could be doing this? And 20% would seem to be reasonable, however many of the most developed countries around the world have debts up to their eyeballs and this debt is only increasing, then it is clear those governments are indebted simply because they are spending more money than what they get in taxes.

[fuguebtc]

Ways to reduce debt:

1.) Raise taxes
2.) Raise GDP
3.) Reduce spending.

Politically inconvenient to do #1 and #3, so the U.S. could try to grow the economy and generate more revenue.

But as revenue increases, so does the spending. It's almost a never ending cycle.

What can the U.S. do about its debt, then? The answer is not much.

There is no way to reduce the debt of the US government or any government, the debt will increase every year because there will be no effective solution to manage an economy with billions of people and it is still growing up every day. If we talk about solutions, we have advisors and economic experts offering millions of different solutions, but so far they are all only on paper and implementation has never been easy. In my opinion, there is no solution to this problem, Government debt still increases every year.

[Haunebu]

All governments around the world have huge debts which they will probably never fully pay off which isn't a major issue as long as it doesn't annoy the citizens of their respective countries in the wrong way.

These debts are completely different from home loans, personal loans etc which don't last indefinitely and have a particular expiration time.

[Faisal2202]

Don't they also do stupid stuff like taking out a loan to pay off an existing one? I've seen them do this one too many times and if the IMF presses them for this loan they might do this again. Plus what of the government shutdown? Is that because of the debt ceiling not being increased in due time? What's going to happen to the millions of US citizens that are under the government's payroll? And why of all departments is the congress still able to take their paycheck as if they aren't the ones who are at fault here? What's going in America?

They of course do that, and I think, the conditions of the whole US do not solely depend on Congress, but it depends on many other factors, but for instance, all I can say is, that every country is doing something, and does have some plan to get out of that mudhole. For example, I just learned a few things about Taxes in the US (I am not from the US), and was amazed to see how huge amounts do US citizens have to pay on their earnings.

While we don't have to pay that many taxes and taxes have a great impact on the overall, economy of the country if the country has enough funds then they are good and can take the risk, but just to be frank, I will stick to my previous statement that, they do have a plan, and they cannot go down, because they going down will take 10 other countries down with them (by down means, economically).

Like seriously concerned about what's going on cause I have a few relatives there, and of course the impending recession and economic crash that they will carry with them once things go south.

Life is really hard at US and I can agree with that, that's why I don't go there and have no plans. hehe.

[Hispo]

All governments around the world have huge debts which they will probably never fully pay off which isn't a major issue as long as it doesn't annoy the citizens of their respective countries in the wrong way.

These debts are completely different from home loans, personal loans etc which don't last indefinitely and have a particular expiration time.

I beg to differ, though.
Public debt may be not as obvious as private debt, when comes to the impact it can have on individual citizens and residents, though it can make much of a difference in macroeconomics. Let us consider a simple situation, where a country gets into a governance crisis and even though they can replace their leaders democratically, they still would have a big debt, isolating them from international markets.

I am not read much about it, but it is something like Sri Lanka has gone through, they got their leaders off the country because of their incompetence, and yet need to face a bad economy and their debts.

USA has the advantage of being considered the most reliable borrower on the planet, so theycan ask for as much money as they want

[dothebeats]

All governments around the world have huge debts which they will probably never fully pay off which isn't a major issue as long as it doesn't annoy the citizens of their respective countries in the wrong way.

These debts are completely different from home loans, personal loans etc which don't last indefinitely and have a particular expiration time.

I beg to differ, though.
Public debt may be not as obvious as private debt, when comes to the impact it can have on individual citizens and residents, though it can make much of a difference in macroeconomics. Let us consider a simple situation, where a country gets into a governance crisis and even though they can replace their leaders democratically, they still would have a big debt, isolating them from international markets.

I am not read much about it, but it is something like Sri Lanka has gone through, they got their leaders off the country because of their incompetence, and yet need to face a bad economy and their debts.

USA has the advantage of being considered the most reliable borrower on the planet, so theycan ask for as much money as they want

You're absolutely right. Although debts don't have such a big effect or impact on developed countries and their citizens, they can be a problem for developing countries. There are a lot of instances wherein a country that is not as economically established as the US finds itself in various debts that the general public has to make a move to remove various government officials out of there positions. However, in the case of the United States, it is not as big of a problem because of the reputation of the country and the relationship it built throughout the years.

[South Park]

You're absolutely right. Although debts don't have such a big effect or impact on developed countries and their citizens, they can be a problem for developing countries. There are a lot of instances wherein a country that is not as economically established as the US finds itself in various debts that the general public has to make a move to remove various government officials out of there positions. However, in the case of the United States, it is not as big of a problem because of the reputation of the country and the relationship it built throughout the years.

The high debt of the US may not seem to be too big of a deal as the country can still function with some level of normalcy, but even the US has limits, it is not surprising that right now countries with different interests from the US are looking to deal with each other with their own currencies and avoid using the US dollar, and while those attempts do not seem to go that well since their own currencies have even more issues than the US dollar, these are signs that countries around the world are getting worried about what is happening, and despite this information being on the open there is no effort to even slowdown the rate at which the US gets more debt.