It’s a complex topic, but national debt is not the same as debt a person or even company would have. It’s by design. How it’s managed is another thing and where things go wrong.
Yeah, basically every government in the world has some debt that they just keep perpetually refinancing to have additional cash on hand. It’s not a problem until you have other stuff go wrong (e.g. natural disaster, economic slowdown, lose a war, etc.) and your creditors get nervous, in which case it can become a real big problem really quickly,
But still, you’re arguably just wasting your government’s power by not using debt/deficit spending, because government debt means paychecks for government workers or contractors and infrastructure or other services for your citizens that can effectively pay for themselves in the long term
e; the punctuation was somehow even worse previously
The short version is that debt isn’t always bad.
A lot of things make money into more money, whether it’s a market investment, a business, or even a lucky gamble. They can fluctuate, but the ones that stick around typically return a reliable percentage.
A debt is generally money that you get to have and use, but probably have to pay interest on.
If you have a reliable way to turn money into more money at a specific rate and that rate is higher than the interest rate on your debt, then that debt is a wise decision to take on.
The reliable way in this case is printing money aka inflating your currency.
Debt can be useful, if you do useful things with it, things like building infrastructure, winning a necessary war, even student loans or for that matter free tuition and healthcare in general.
Debt taken on to extend your other debts coming due because you’re perpetually stuck in a negative income loop due to your poor national budget policies?
No. That is not useful debt. That is a death spiral, and it’s one that’s been created as a deliberate strategy.
Well one could argue that the US started the debt for good reasons. But yes, right now, the debt is bad because it’s funding genocide, supporting child torture, and enriching pedophiles.
Keeping it very simple:
The government sells tickets for which buyers pay $100. If the 10-year treasury bond rate is 10%, tickets can be turned in after ten years to get $110. If the government uses the $100 they get at the start to build something which allows them to collect at least $110 in taxes, (things like infrastructure to enable commerce, or educational spending to increase personal income, etc.) it covers its costs. There are complexities but this is the boiled down version of how many government activities are funded through debt.
As for who is owed the debt, it’s whoever holds the tickets. They can be bought and sold at will so investors trade them regularly. They are generally the low-risk/low-reward option for investment because they don’t usually pay a great rate, but will only be a loss if the country itself collapses.
The debt is created selling government bonds, which are basically iou’s. People buy them as investments, you might have some if you have a 401k or Ira. The U.S. currently has a decent credit rating.
We are in debt to ourselves.
Blackrock, state street, vanguard and the parasite class who own them
