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With the debt higher than the money in circulation the US government can never pay off the debt.
Quote:
Originally Posted by Hoonose
...no one is asking for the federal debt to be paid off.
But if the National Debt, and/or to whatever degree anything about really reducing that never higher debt load burdening our grandchildren,
such funds DO NOT and WILL NOT and NEVER HAVE ever come from the US Government.
But if the National Debt, and/or to whatever degree anything about really reducing that never higher debt load burdening our grandchildren,
such funds DO NOT and WILL NOT and NEVER HAVE ever come from the US Government.
What USD was not federal government or Fed issued?
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?
The intention is to never fully pay off the debt, and the US doesn't have to and probably should never even try. A national debt allows fiscal flexibility. As Alexander Hamilton said "A national debt, if it is not excessive, to us will be a national blessing." The key term is "excessive", and I think we all agree that today it is.
My point here is you should rephrase your question: The national debt should be reduced, not paid off.
Anyways, who gets the $500 billion? The national debt is funded mostly by treasury securities (although they have other options including, as you said, tax revenue) so obviously investors would get it. In turn most of these funds would be reinvested into new or existing treasury bonds, or alternative investments. This of course happens all the time. The fed just issues new treasuries. So again, you should rephrase your question to address what would happen if no new treasuries are issued, or the impact of a when a debt ceiling is reached.
actually when you add up the value of everything in this country vs the debt , the ratio would still qualify for a loan.
total us value is estimated at 140-225 trillion with a us debt of 34 trillion or so
Some argue the unfunded liabilities (entitlements) are the equivalent of total US assets now-ish.
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