An Avalanche of Debt
Updated: Oct 2, 2019
$22,000,000,000,000. That is the amount the United States of America is in debt. There is no way to comprehend that much money, except by what it can buy. You can buy all the sporting leagues. Not just the Cleveland Browns, but all the teams of the NFL, NHL, MLB, NASCAR and still have a lot of money left over. You can also purchase APPLE. Apple is on the verge of becoming the first trillion dollar company. After you pass out free iPhones to everyone of your sporting employees you can then put their children through at least community college. You've taken care of entertainment, education, and technology and now you want to make an impact on the environment. Just buy everyone in the United States that is over 18 years old a $73,000 Tesla Model S car. That's what the debt will buy you.
That much money is a scary thing to think about, but the finances you're familiar with is not the same finances as the United States Government. For one, the U.S. gets to print it's own money. You can't do that without going to jail.
Also the Gross Domestic Product of the United States is about equal to that amount of debt. It's like saying you make $60,000 and you owe $60,000. Most middle-class families has much more debt than that when adding up the house, car, and loans.
The Government has the ability to tax and enforce the tax law on its citizens. I can't really tax my children...except the occasional french fry theft. And if they refuse I can punish them , but to what extent?
If the government decides to print more money it can lead to inflation. Low inflation while driving up the debt is not detrimental. So long as inflation doesn't go out of control and employment is stable then the debt really doesn't matter much.
And remember, for every one of those dollars spent it has to go somewhere. Any time a dollar is exchanged there is value created that is worth more than that dollar. If I didn't value the candy bar more than the dollar I exchanged for it I wouldn't give away that dollar bill and that's even considering if I financed that candy bar.
Anyone that holds U.S. debt now has a vested interest in seeing that issuer survive. The citizens of the United States holds the most debt followed by China, Japan and Brazil. None of these entities would want the U.S. to default. The U.S. debt actually shows how economically healthy the country really is.
The real danger in the debt is the debt ceiling. If we are continually having to raise it there might be a day when we don’t and are forced to default. The other thing that can make the debt dangerous is when running that debt isn't promoting growth in the US.
Nations don’t have to pay their debt, they only have to service it.