Beyond the Brink: Unraveling the U.S. Debt Dilemma

The sovereign debt crisis, once associated only with emerging markets and developing nations, has now become a potential future for the United States. Presently, the US national debt stands at a staggering $33 trillion, with a debt-to-GDP ratio of 120%, the highest level since World War II. Despite these alarming figures, there is still a question of when exactly the United States' debt issues will become problematic.

To answer this, let us delve into the numbers and examine the most important metric to consider. In personal finances, one would look at their net worth, which is the difference between assets and liabilities, as well as their income versus expenses. A positive net worth and positive cash flow indicate a healthy financial situation. Conversely, a negative net worth and negative cash flow, where expenses exceed income, are viewed as unsustainable.

For the United States, the situation is similar, but with a significant advantage: it is the government. Being the government grants them a monopoly on violence, enabling them to collect any amount of taxes and borrow additional funds below market rates. Should these methods still prove insufficient, they can turn to the Federal Reserve to purchase their debt. These three avenues of taxing, borrowing, and printing money allow the US government to continually increase their income to meet necessary

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