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.
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
All debt is bad. That includes government debt. The government should be budgeting like a household budget: 80% spending, 20% savings. That way, when (not if!) difficult times arise such as natural disasters, there are ample resources available to cover the expenses incurred and then debt is never a thing at all. Anyone who says otherwise doesn't understand the nature of money and they are committing treason against this nation. That is, these economists want to spend willy-nilly and balloon the national debt to astronomical levels and cause the nation to collapse as a direct result. We're already on that precipice in the first place but they want to push us over the edge. The debtor is slave to the lender.
What in the MMT hell is Stephanie trying to spin?
Debt ceiling is the only thing limiting unnecessary spending. Now refuse to raise it and force reductions.
MMT is insanity
cnbc doesn't know how to do subtraction ????
Notice they never answered the question of why the US won’t pay down it debt? answer: Cause every US President had been fiscally irresponsible!!
One person's debt is another's income. It washes out in the end as long as we continue to produce. If there's nobody left in the future there's nobody left to collect. Whatever happened to that guy that was preaching against debt who talked about taking something from one side of a pool and pouring it into the other as if that didn't make sense It does it's how the economy works and it's why we have the highest material standard of living in history. Japan is growing slowly because it's in a population decline and that's why Japan is suffering from deflation instead of inflation prices are going down not up don't believe anything the debt chicken little heads say about the catastrophe of debt when it comes to highly productive advanced highly educated populations and countries once you get the ball you can run with it for a long time. Besides all that, the United States has about 270 plus trillion dollars in assets. You can Google the "financial position of the United States" as of 2014 and find out. If you have 33 trillion dollars in debt but $270 plus trillion dollars in assets you're not sweating this at all The republicans don't mind "spending" when they're in power but want to make this an issue when they're not. It's ridiculous don't be one of the rubes that get caught up in their BS.
This public infomercial was brought to you by the Democratic Party
I'm baffled by this video. Isn't debt worse than no debt?
While debt may or may not pose a problem in the future, what is necessary is to build the critical military, cybersecurity, and civilian infrastructure for the nation's long-term security.
Future generations of creditors will pass away, may be willing to negotiate down the debt, and future global events may even reduce the value of that debt.
Worries about debt, shouldn't stop the current generation from laying the physical infrastructure, the absence of which will definitely undermine the nation's position and lower its standard of living.
We cannot continue exponential growth of US debt no matter what you say!
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Noting to see here go back to sleep
Debt-to-GDP is not a good metric for measuring a government’s ability to service debt. Debt-to-Tax Revenue would be better. You can have a booming economy, but if your tax rate 0.1% on income then the Debt-to-GDP ratio is meaningless.
commenting from Italy, currently at 135% of debt to gdp ratio, believe me when i say that it really count!!!
we were the 3rd greatest economy in the 80s but bad econominc politics created debt, to repay it they raised taxes increasing the cost of living and decreasing the net income, that generated a drastic decrease on natality because nobody has money to spend for a child, that lead to a pension crisis because there is more than 27% of the population in retirment and fewer and fewer workers, companies left the nation, and so on….
right now we are 8th economy in the world..
a country is like a private company, at the end of the year the balance needs to be at least around zero
the Japan argument is false. Japan is considered one of two "strange" economies in the world. also 95% of Japans dept is helb by its own citicens.
American bonds is the biggest Ponzi scheme ever. Nobody will tell you that because the crush will be devastating to the whole world, everybody try to postpone that as much as possible.
It does with similar we barrow from the FED.
Debt vs GDP ratio doesn’t make sense. State income instead GDP would make a more realistic indicator
This is propaganda BS !
The USA has a lot of debt but also has a huge amount of resources and ways to manage it's debt. Thinking there is some crisis around the corner is pretty short-sighted. Just a few options.
1) The USA has pretty low taxes compared to other advanced countries. If it had to (and I hope this doesn't happen) it could raise taxes, introduce new taxes, etc to help pay for the debt. USA's GDP is $26 Trillion and Tax Revenues are $4.9T. That's only 18.9% of USA's economy goes to Taxes. Almost all of Europe is 30%+. Again, I hope this isn't necessary but definitely a possibility
2) Debt issuance are just contracts. Contracts can be renegotiated. They could extend terms or offer other forms of payment (military equipment, military protection, treaties, etc).
3) Print Money: This probably wouldn't have the dire circumstances that people think. Remember these foreign governments are holding treasuries in reserve. Reserves serve a lot of purposes. It's not just rainy day. They need dollar denominated currency to transact internationally. If the USA printed money and paid off the debt to Japan. Japan would then hold dollars in reserve. So it's likely that those dollars wouldn't actually hit the open market. They would sit in an account in Japan somewhere for years just like the Bonds do. Again, debt is a contract. If USA paid it off with dollars they could negotiate with countries to hold the currency for the term of the bond. They are just swapping one piece of paper for another. This would then essentially make the dollars function exactly like the bond.
Remember, the rest of the world NEEDS the USA to keep functioning well. They don't want the USA to default either. I'm sure there are many other options available if it really came down to it as well. So at the end of the day the doom and gloom of USA default has a 0.01% chance of happening. Maybe the USA won't be thriving but it won't fall into crisis because of debt…at least not any time soon.
Cannot pay what you ain't got.
Public debt … lol
I recently went around the world and everyone has their share of issues. So, US citizens funding the US Govt itself is a big deal or shows how rick the citizens are relative to world.
Did you know if we stay at the current interest rates for 8 years, the Interest on the National Debt will be $11 Trillion a year? Did you know our entire economy only takes in about $4.5 Trillion currently? Did you also know by 2031, the US Federal Debt to GDP ratio will be 183%? The “Math” doesn’t work……..