America’s Looming Debt Spiral

The cost of servicing US debt has surged. With solutions to the problem seemingly trapped in political gridlock, kicking the can down the road has been the norm. But at some point, failure to tackle the US’s large and growing budget deficit is going to hit the wallets of ordinary Americans.

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[tonysilke]

The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.

[yolandabyers]

$1.8 billion spent per day to service U.S. debt. Smh! Worst payday loan ever! 😮

[Chickenlegs]

I watched as the debt increased by $275 billion in 1 day only a couple of days ago. The amount of Gov waste is terrifying.

[impleasen]

Its $13, 000, 000, 000 billion dollar aircraft carriers
$2, 000, 000 million dollar missle to shoot down 1000 dollar drones.
Being a big bully is really expensive

[tobiwan]

Teh deficit is now at 1.7tn, but at low interest rates. If the US had to refinance at current rates it would increase by another 1tn alone. So the longer interest rates remain that high, the more the deficit will explode increasing borrowing even further making a debt crisis even more likely. But if interest rates are lowered and inflation is not kept in control, interest rates on US debt will spiral out of control. The US has put itself into a corner.

[nicolasbenson]

The US economy cannot survive without continuous credit and debt creation. The FED will print more money and the average American will go just that much further in debt. Meanwhile, foreigners lust for the greenback. Their economies are in worse condition than the US... if that's even possible. Someone is going to be left holding the bag...

[antifoxist]

US debt declined from the end of WWII until 1981 from 110% of GDP to 30% of GDP. Since Reagan's innaguration in 1981 until now the debt has exploded back to 110% of GDP. Between 80 and 90 percent of that explosion in debt occurred under RepugliKKKlan administrations.

[PhonkEcho]

The only reason US spends so uncontrollably is because its value is derived from being the reserve currency across the world. If that changes, the US economy will collapse

[Reptanimalposts]

Medical = debt. Housing = debt. Car = debt. School = debt.
Taxes - on everything.
Even tried taxing you for breathing.
Eliminated horseback trails and travel by putting fences everywhere.

[polyverse]

For years we had the ability to export death to other countries because our currency was the global reserve currency. That’s why our exchange rate in foreign currencies nexts is higher purchasing power, but now that more than half the countries on the planet are dedollarizing and not buying or dumping our bonds inflation is rising because those dollars are coming back to our shores.

[janetlucas-ebpk]

Inflation hits people a lot harder more than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of It's not surprising that the negative market sentiment is so high now We really need help to survive in this Economics.

[hansudowolfrahm]

1 month later it's at 33.7 trillion in debt 😐

[Mattius]

Everyone get ready. This is going to impact everyday people. Learn some skills. Next 3 years are going to be brutal.

[terrymoore]

How does USA borrow money that does not exist. Wish I could do this!

[moderatelyapathetic]

I can’t tell you how many times I’ve seen people claim “the National debt doesn’t matter”. Some people willingly choose to not live in reality

[lisalovespandas]

They are always increasing taxes because inflating a currency causes inflation or as the Nobel Laureate, Milton Friedman, suggested in a speech amidst the period of rising prices in the 1980s, inflation can be thought of as a hidden tax for rampant government action.

[rightwingsafetysquad]

Almost by definition, all governments with sovereign currency have to run a deficit. Money doesn't go to the government from the private sector, money comes from the government. The limit on government spending is not tax receipts (not directly), it is inflation. To this end, it is not the total debt that matters, but the interest rate on that debt and the rate of new deficits being added. The U.S. can get away with a lot more deficits than other countries because we have the reserve currency, but that difference is in magnitude only, not in kind.

For decades the budget hawks have been wrong. Most are still making the wrong arguments. Unfortunately the conclusion that too many have drawn, that deficits don't matter, is also wrong.

Rising interest rates coinciding with exploding deficits are revealing the calamity we're in. Once upon a time, Paul Krugman wasn't an idiot and wrote an excellent piece about how sovereign debt over 120% of GDP makes interest rates impotent as a tool to control inflation. Our economy is not healthy. Economists all expected a recession last year, but we didn't get one because of $2 Trillion of quiet stimulus, mostly from the "Inflation Reduction Act". There are trillions more in state and municipal accounts to be spend in the next 2 years. This is all debt financed at around 4.5%. This culminates in the interest paid on the debt rising faster than tax receipts, which means that the debt must be paid by devaluing the currency. Japan is the only country to have ever done this semi-successfully.

[eskay]

Everytime I hear of the massive US debt, I cringe to imagine of how much more weapons / military equipments that is needed to churn out to the world. US is like the death reaper looming in this world.

[brunobarbarioli]

quite shallow video. saleha mohsin incorrectly used debt and deficit interchangeably when talking about financing. Bloomberg is usually better at this.

[JohnSmith-krek]

Sept 18 2023 the US hit $33 trillion in debt.
As of Oct 9 2023 the US debt is at 33, 480, 000, 000, 000. Zimbabwe here we come .