Why The U.S. Won’t Pay Down Its Debt

The U.S. national debt is nearly $33 trillion as of early September 2023. Every year since 2001, the U.S. government has spent more money than it takes in, which means it has to borrow money to make up for the difference. The national debt is frequently discussed as a danger to future generations, but some economists say there’s no reason to get the national debt down to zero. One reason for that is without the debt, there would be no federal government securities, such as Treasury bonds, which provide investors a safe place to park their money while accruing interest. Most economist warn, however, that there’s a balancing act when it comes to the national debt. Watch the video above to learn more about why the U.S. can’t get a handle on the national debt and whether it even has to.

Correction on Sept. 12, 2023 at timecode 0:11: The voice over has been updated to reflect the national debt grew $300 billion between July and September 2023.

Chapters:
00:00 — Introduction
01:39 — The role of debt in the economy
03:28 — How debt can harm the economy
06:17 — The global economy

Produced by: Charlotte Morabito
Edited by: Amy Marino
Animation: Jason Reginato
Supervising Producer: Lindsey Jacobson

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Why The U.S. Won’t Pay Down Its Debt

[LoughBellis]

Invest judiciously, keep a stop loss figure. Shuffle between debt and equity wherever the ratio goes too off your target. As for the target, I recommend a Ratio like this Debt % should be equal to your age in years. If you are 20, debt is 20%, reset in equity. If the market falls or rises drastically, your debt % will change, which you should rebalance to 20% and bring back equity to 80%. Thus you would have bought low or booked profit depending on if it was a crash or a bull run.

[FabiWann]

"It's better to burden the future generation with debt (taxes) than to burden the current generation with taxes." Fixed that line for you CNBC.

[JennaHerberholz]

I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.

[NicholasBall]

I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.

[davidj]

The government’s debt doesn’t work like household debt because a household can’t print more money to pay its bills, lowering the value of everyone else’s money.

[Legoman]

“Borrowing is a way to not burden the current generation with debt”. So burden the next generation with our debt?

[Beatricegove]

The only American who won't acknowledge this Administration's failed economic policies is Joe Biden. "Shrink-flation' is the least of our worries compared to rising rents and stagnant wages, but it is an undeniable indicator of how bad our inflation has gotten. I have $100k that i like to invest in a non-retirement account, any advice on that?

[ShellyHuerta]

I think it's important to stick to stocks that are immune to economic policies. AI stocks that have the potential to power and transform future technologies. It seems AI is the trajectory most companies are taking, including even established FAANG companies. Maybe there are other recommendations?

[naturalselfyoga]

If the debt doesn't matter then the US should stop taxing us. Just keep borrowing the money they spend.

[VideoSiteAccess]

What I got from this video as to the why’s:
1- Everybody else is doing it.
2- Spending in the now is more important than saving for the future.
3- The US is too big to fail.
4- Nothing that bad is happening.

[ChristopherAbelman]

Inflation is putting my dream vacation on hold. Every penny counts these days, so that fancy getaway abroad will have to wait until this inflation mess chills out.

[Powerz]

is it really worth investing in stocks in 2024, I’ve been on the sidelines watching the market for awhile and it seems to be pretty stagnant to me not that it matters because I’m in it for the long run, but how can one generate actual profit in this current market?

[planewire]

They failed to mention that 70% of our tax revenue would end up paying only the interest payments

[FrankPatrick-nozo]

The debt ceiling is always rising, so don't worry. If the 2008 crisis survivors had it any easier, I wonder. My income is decreasing, I lost $35, 000 this month, and I'm worried about the stock market. Fearing that because I can't contribute to my savings, I won't have enough money saved for retirement.

[gagnepaingilly]

Since the debt crisis could unleash carnage on the stock market leading to economic downturns. We need to be prepared for potential market volatility. how can I secure my $250K stock portfolio against declining?

[juliopaveif]

Why does it feel like this is a paid ad?

[Quantitative_Teasing]

I cannot believe how Stephanie Kelton, the proponent of this MMT insanity, still has the audacity to come and postulate that debt has no consequences after that insane bout of inflation we just had by doing exactly what she advocated. Debt has consequences, monetizing debt is even worse.

[furanduron]

Imagine being so bad with money that you can steal 40% of peoples income and still end up in 33 trillion dollars of debt.

[RonaldPaul-rskt]

Don't fret, the debt ceiling always goes up. I wonder if 2008 crisis survivors had it easier. I'm concerned about the stock market, I've lost $35, 000 this month, and my income is down. Worried I won't save enough for retirement as I can't add to my savings.

[brianwhitehawker]

We can't ignore the potential impact on portfolios. Bonds are often considered a safe haven, and if they crumble, investors like me might scramble. I’ve been investing for 11 yrs and my $1m portfolio has never been this depleted, how i do hedge this?