"Ourselves" meaning people who have invested in Treasury Bills and other US bonds. Writing it off would mean eliminating massive amounts of wealth. That isn't really politically tenable for anyone.
That doent make any sense. There's no way we *sold* $1T of bonds and t-bills in 1 year.
That's what I'm asking who the debt actually belongs to. If it's "us", then how was it generated, who accepted the debt risk, and why's it going up faster?
Again, I make an analogy to $10000 tylenol pills, $16000 bandaids, and other obviously absurd medical fake number pricing. This $1T per year feels just as absurd and fake. And well, it's also a great wedge in Congress to bemoan and attack/shut down congress over that made up number.
Yes, we sold $1T of Bonds and t-bills. About half were sold to banks and foreign countries. The other half was sold to the social security retirement fund (in exchange for SS tax revenue)
The same reason you think it is absurd and fake is why others are panicking about the debt.
13% of federal taxes go to paying interest on the debt. That is 13 cents of every tax dollar paid. It is on track to hit 20% in the next 10 years, and that is assuming the US economy and tax revenue keeps growing.
Japan, UK, China, and the Cayman Islands are the largest private holders of US federal debt. [1]
What part of this seems incredible to you? It is indeed a lot of debt spending.
Why does $1T seem unreasonable? You can check the auction results, and from my quick look at a couple recent auctions, combined with knowledge that the auctions are routine and regularly scheduled, the number seems plausible.
It's not really $1T sold though, $1T would be the net sales, as many bonds and bills would have matured in the same period. Gross sales is much more than $1T, but I'm not going to dig through to find those numbers.
You could maybe discount some of the issuance as internal borrowing/lending/savings, but if you want to treat programs as independent, then the interactions between programs and the general budget are real enough.
The government won’t just write it off, that would be a default or magicing the money into existence (which the government CAN do), because the world economy would go insane. The government has the ability to do this but is extremely strongly incentivized not to do it because of the effects it would have.
The US government is a currency issuer so it’s possible but not advisable.
U.S. government debt is the safest investment you can make today. If you "write if off" by simply telling debt holders you won't pay them, you'd make U.S. government debt the most unsafe investment possible. Nobody would ever buy U.S. government debt. That, and peoples' pensions and other retirement accounts that hold U.S. government debt would be hammered.
Although I recognize that at this moment the force of the United States Constitution has been shown to be minimal, I direct your attention to this clause:
"The validity of the public debt of the United States [...] shall not be questioned."
Debt pulls future income into the present, so yes, the $38T is what we owe to our future selves. The thing is, your present self already knows if your future self is owed something (you own a bond). So writing it off is taking that person's money and not giving it back in the future like you promised. That does obviously does not go over well, plus it has unpleasant secondary effect. What you do is that you print more money and inflate it away.
Everyone is in denial about the whole situation. The sensible solution is probably the FED targeting a higher inflation rate than the 2% they would prefer and work it out slowly. Nobody is sensible at the moment, so we risk having either out of control inflation for a shorter time, or a lot of people lose money. If you have too much debt, people are going to lose money. The question is the amount of pain (and the collateral pain from secondary effects) that goes with it.
He or she meant 75% US people. But not everyone. Just the upper ones, who don’t have mortgages but lending the money to people - now on higher rates haha
Or is this some 38T$ leveraged against our future? Like how this debacle in Chicago screwed over 75 years of residents.
https://www.courthousenews.com/seventh-circuit-upholds-chica...