Why the US government can never pay of the debt

[Bubble99]

Originally Posted by Thatsright19

Germany had foreign debt owed in those currencies. U.s debt is owed in USD.

Also Germany lost ww1 and had extraordinary negative provisions in the treaty of Versailles to punish them. Which of course, wasn’t the best idea in hindsight.

But I wonder what would have happened if Germany was not printing like mad but did the opposite and under print?

[Hoonose]

Originally Posted by Bubble99

But I wonder what would have happened if Germany was not printing like mad but did the opposite and under print?

Personal, business and economic failure everywhere in their country even sooner. Their basic problems were related to their loss of national productivity, and having to pay reparations in a currency they had no control over.

[PrinceHowell]

Originally Posted by Bubble99

With the debt higher than the money in circulation the US government can never pay off the debt.

Also Let's pretend the government debt is $33 trillion and the money in circulation is $1 trillion.

The government collects taxes and pays off $500 billion. Who got the $500 billion?

Hey!

The US government's debt is indeed massive, and it's often compared to the money in circulation to highlight the scale of the challenge. When the debt surpasses the money supply, paying it off entirely becomes practically impossible without significant changes.

Now, let's dive into your hypothetical scenario. If the government were to collect taxes and use $500 billion to pay off the debt, that money wouldn't just vanish. Instead, it would likely be redistributed in various ways. Some of it might go towards government expenditures like healthcare, infrastructure, or defense. Another portion could be used to pay interest on existing debt or to fund social programs.

Essentially, the money collected through taxes gets circulated back into the economy through government spending, investments, and public services.

[MKTwet]

As long as other trade partners uses dollar we can print and take their goods. They all work for the dollar as long as we remain the world super power.