US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
truthinaccounting.org
truthinaccounting.org
It's a bit like concluding that you're a million dollars in debt because you are going to need to buy food for the rest of your life. I suppose it's true -- it is something you need to plan for. But it's misleading to suggest that it means you're automatically destined for bankruptcy.
The fact is that Social Security is in trouble: the pay-as-you-go plan doesn't work with an increasing lifespan. The establishment of the Trust Fund didn't really solve it -- it really just increased the size of the federal government without having to explicitly borrow money (and then still somehow managed to also have to explicitly borrow money).
But that doesn't make "$146T" a meaningful number. The meaningful number is 2033, the year Social Security is projected to run out of money. Also, conveniently, the year I qualify for Social Security -- this is something Gen X'ers have always expected, though it got worse during the pandemic.
That doesn't automatically mean we won't get anything, but it does mean that the government is going to have an even harder time meeting its obligations.
Not saying the U.S. default on that debt. Just that, for accounting purposes, if you're including far-in-the-future liabilities, you should also take into account the fact that every dollar of interest paid by the U.S. Treasury to the Fed ends up, more or less, back in the Treasury's account.
This is all wrong and it does not ignore this. The calculation only includes the portion of future obligations that can not be funded based on future revenue estimates. It does not simply take future expenses without taking into account future revenue as that would be patently absurd.
Furthermore it only includes future obligations that have currently been committed to, so for example it does not make projections about people who will at some point in the future be enrolled into Social Security (for example people not yet born).
This is the year the trust fund runs out of money, at which point Social Security won't be able to meet its full obligations, only what it can cover with current payroll taxes. Social Security can't run out of money unless the taxes that support it are eliminated. "Social Security won't be available for you Gen X'ers" is misleading propaganda spread by people who want Social Security to go away. When the trust fund is tapped out, unless we remove the income cap, Social Security will be less generous. It won't go away. If we remove or lift the income cap, this problem goes away altogether.
I wonder if we could put SS on capital gains, even at 1%. That would help this include investment gains.
But it means that people with disproportionate political clout would be taxed more heavily than in the present circumstances, so it would face an uphill battle.
Not really, you could do what the Jeff Bezos does: "0 profit" (by reinvesting everything) and just enough income to live (very well, but still). Meanwhile the stocks he has amass value (and he can trade stocks, which can't be a taxable event if you use the company to do it and "don't do it yourself", for good reasons (for example joint-ventures would become impossible if this were to be taxed)).
So you can still amass large amounts of wealth under these circumstances without getting taxed on them. Plus you can cheat by having the business pay for your expenses (and if you live for your job that's not even unreasonable).
This isn't GenX complaining that Social Security should go away. That was GenX complaining that Boomers spent the 80s spending extravagantly through the federal government, and racking up enormous debts, while patting themselves on the back for being fiscally conservative.
It wasn't the Social Security they were unhappy with, but the other expenditures. Which expenditures, of course, are always hard to pin down -- it's easy to complain about the bottom line but not to say what you want to cut. Many would point to the ballooning military budget -- and that's all before 9/11.
But that's water under the bridge. We still expect to receive less Social Security than our forebears, and there's practically nothing we can do about it.
The Silent Generation was politically dominant in the 1980s.
Boomer political dominance was more a 90s and later thing, and the first decade of that was something of a period of relative fiscal responsibility.
> We still expect to receive less Social Security than our forebears, and there's practically nothing we can do about it.
Wel, demographically, yes, there's little GenX alone can do about it. It’s pretty trivially fixable, though.
This comment is excellent, except for one clarification: "Social Security" is not going to run out of money. The "Old-Age and Survivors Insurance Trust Fund" will run out of money in 2033 (the disability insurance fund is solvent until 2057). After this happens -- and assuming no action by Congress -- Social Security will still be able to pay 76% of benefits to retirees based solely on payroll taxes collected. This isn't a great outcome, but it's far from insolvency.
The government can fill it, but it will need to pass laws to do so.
78% actually. See Figure II.D2:
* https://www.ssa.gov/OACT/TR/2021/tr2021.pdf
It falls to 74% by 2095.
If you have to pay annuity to a relative until they die, I don't think it reflects a good picture of your net worth to ignore that number either.
This is intended to make the median viewer, who will never see that much money at once in their entire life (and will take 20+ years to even make that much before-tax), feel that the Federal government is being irresponsible. It's an obvious push for fiscal conservatism which, crucially may or may not be warranted by the actual facts.
To state the obvious, most people out there do not make enough money to plausibly pay one million dollars in taxes. Therefore they will not be paying one million dollars in taxes (you can't squeeze blood from a stone). The inevitable result is that either the U.S. government is doomed to go bankrupt (what they want you to think), or rich people will be contributing more than that to the United States' debt obligation (hint: they already are).
It is.
https://tradingeconomics.com/united-states/government-spendi...
The situation is not ideal, but it isn't cataclysmic:
> The authors of the most recent report even took their calculations out to the year 2095. At that point, they estimate payroll taxes should still be able to cover 74% of payouts to Social Security recipients.
* https://awealthofcommonsense.com/2021/09/can-young-people-st...
The report in question:
* https://www.ssa.gov/OACT/TR/2021/tr2021.pdf
Two possible solutions (non-exhaustive): increase pay cheque contributions, use general revenues to make up the shortfall.
The way I read the statistics is that the current debt is $28T of money that is already spent while the quoted debt of $146T is the amount of money needed to be spent to fill full current promises and expenses.
It's interesting that since the USA got off the gold standard in 1971[1], and thereby all countries that had a currency backed by dollars, the average household income has risen 5x but the price of goods like a house have gone up 10x. This became possible because all for a sudden money was not backed by gold anymore, but could simply be printed when needed. This created huge money supply inflation [2].
Everything is getting too expensive, and the only reason we don't feel this too much just yet, is because often times cheaper alternatives where available.
My parents are in their 70's and they still have furniture that was (second hand) given to them when they got married. Can you imagine an piece of IKEA furniture being used daily and lasting for >40 years? My point about "cheaper alternatives" exactly...
[1] https://mises.org/wire/today-1971-president-nixon-closes-gol...
Which IMO explains why Europeans tend to feel more comfortable even with salaries that, on paper, are significantly lower. The American middle class is getting squeezed by this particular class of costs.
Europeans are comfortable with lower salaries because they believe they're paying taxes for the greater good. That's often not the case.
I speak from experience here and I'm sick of people putting universal healthcare and other European shit on a pedestal.
Now, butthurt Europeans and especially little angry German trolls can start downvoting, but remember, ignore something for too long and it can turn into terminal cancer.
The one thing that's not included is retirement. You're entitled to Social Security, which is inflation-indexed with the CPI.
Individual retirement accounts are usually based in the stock market, which has been doing gangbusters -- for those who can afford it. That is becoming unaffordable, and it probably is because of "money printing".
That's where the inflation shows up: asset markets. The increase the money supply but it disappears out of the consumer economy almost immediately. Consumer prices don't go up, but asset prices do.
Because we're encouraging yield chasing in order to lower unemployment.
Look at this post to see how many different measures of inflation there are. Each of these get at different aspects of the economy:
https://econbrowser.com/archives/2021/08/measured-inflation-...
https://econbrowser.com/archives/2021/09/inflation-a-compreh...
As for money printing. Per US law, money cannot be just printed by the Treasury. It must be borrowed from people who already had dollars to lend.
New dollars enter the economy when banks lend money; that is the main engine of new money creation, and it is responsive to the economy. Usually, banks don't lend when its too risky, and businesses don't borrow when it won't lead to profitable growth.
If both of these happen to balance, prices appear to stay the same.
Presumably you'd only get a true number out of something (a) with a fixed amount in circulation, (b) internationally traded, & (c) universally valued. Even precious metals are subject to production costs and industrial consumption.
Two answers:
1) Yes. Very, very easily. For at least some IKEA furniture. 2) I somehow doubt that second hand furniture was from the 'IKEA of that day'.
I think that's the parent poster's point. Presumably his parents are not significantly wealthier in relative terms than he was, but they could afford more premium furniture than most people today do.
I'm typing this on a computer that was given to me by a company that didn't need it any more. I could afford to buy a new one. But since the one I have is more than enough for my needs, I don't need a new computer, so I don't buy one.
I definitely don't think that tells the whole story, but do think it could play a part in it.
You can still do that today, and get a wardrobe for 8K, that lasts 40years. But now we do have "cheaper alternatives". His point exactly.
That's ridiculous - of course there were. Sears & Roebuck were selling furniture out of their catalog well over 100 years ago, and that was far from the only option.
Real personal income has consistently gone upwards.
Even if tastes change, styles usually come back around, hence why good century- or MCM furniture is so sought after as antiques/vintage.
It's to be seen if laminate or pressed fibre board furniture will stand the test of time, even if it comes back into style in 25 years. HDPE might last longer, as long as it doesn't discolour or crack.
We moved from a tiny condo to a house this summer. Rented a Home Depot van and ran around picking up free/extremely cheap solid wood furniture! Pieces that cost many thousands new, you can get for $50 or some other token amount. And then you keep it for years, decades, whatever.
I don't know how much it might have cost new, but decent quality, older tables, for example, are easily close to $1000CAD and up. This is both antique stores (where there is a understandable markup), but also Craigslist/Kijiji. The only place I've seen similar furniture go for anywhere near $100 are auction sites, but these don't come with the downside of not being able to inspect the piece, and often require you to drive 100s of kms to pick it up. I might also include yard sales, but they are far and few between.
From the sounds of it, you are not located near a large city. That may be the difference. I am in the Chicago metro area. I lived in skyscrapers for the last 20 years - in the city there is no stigma attached to doing anything, so there is a thriving market of giving things away or selling them to avoid the trash. All the skyscrapers have loading docks and freight elevators (and they all charge money to dispose of large things that don't fit in the regular trash). It's easy and nobody looks at you strangely or judges you. Out here in my new house on the edge of the metro area, you can tell that things are different. There is less stuff available and when you talk about it people either have a blank look or raise an eyebrow as if to say "Why would you do that, don't you have any money?"
Perhaps next time you head to Toronto/Calgary, bring along a trailer?
Yeah. IKEA's not bad.
and because my LEAPS go up way more. They can increase the money supply by 40% and it won't matter when my LEAPS rise 10,000%
Don't forget, when "everything" goes up in value, so do stocks as well. Don't focus on the potential of Weimar bread lines, and look at the stock speculators who made baaaaaank! Its not an egalitarian system, play the cards you were dealt!
Dead on. It's pressure from both sides, so to speak. Not only are we paying more for goods, the goods themselves are declining in quality.
Furniture is a great example. Another is home appliances. Refrigerators, washers and driers etc have absolutely tanked in quality.
We are getting less for more money, but inflation only counts half of that.
We also have a tendency to replace them when broken for simple things.
When I tell people I repaired or had someone repair an appliance in my house they are often surprised. They just think of tossing it and getting something new. Repair isn't even on their mind unless their part of one of the older generations.
Part of this is cultural.
People now consume more than they used to. For many generations people patched their clothes. Now they throw them out. It's a culture of consume, toss it, consume some more.
That culture influences personal decisions and those we influence for our companies.
You can still get high quality furniture. If you're going to replace it soon due to style changes do you care about quality?
Housing is larger but also older and mostly driven by proximity to good schools. It is hard to consider the other expenses discretionary.
This was the conclusion a Elizabeth Warrens research summarized in The Two Income Trap.
This could and did happen before 1971. The US government has always been able to issue debt. And paper money, in the form of bonds, has been a staple of the country's financial systems since long before it was a country. Mostly owing to the fact that England largely prohibited the export of specie to the colonies. Forcing states to figure out their own monetary systems.
> Can you imagine an piece of IKEA furniture being used daily and lasting for >40 years?
Yes. I have plenty of of IKEA furniture that's seen daily use for ~20 years and still looks brand new. People don't seem to realize this, but IKEA does sell solid wood furniture. I have an entire bedroom set (and matching shelves) that are made of solid wood with a thin resin coating that prevents scratches and dings. The bedframe does need the screws tightened on occasion, but with the dresser, I put it together with wood glue and never bother to empty it when moving (glued dowels are essentially as strong as a mortise and tenon joint) . It's survived like five moves without issue. My old desk found a spot as a work bench in my shop as the tabletop is incredibly durable. I'd love to find another one.
My parent's house still has the IKEA flooring that we installed in like 2002. Even their cheapo furniture isn't bad. I'm still rocking these $5 end tables that I bought in like 2008. I put some dowels in the feet and stacked them to make a shelve that converts into a low table for my shop.
Not only will IKEA furniture still be around in 40 years, due to survivorship bias, they will be known for making incredibly durable furniture by future generations.
how about bamboo tabletops?
https://www.ikea.com/us/en/p/anfallare-tabletop-bamboo-00465...
There is a trick, what I like to call value extraction, that companies do in place of financial extraction(or raising prices).
This is commonly known as shrinkflation in regards to commodities, such as cereal, as the company provides less product for the same price and as such the product has to be bought more. People just buy their product as usual and don't realize the quantity has gone down and just have to purchase more and more.
In the sense of a more tangible product, like a tool or shoe, the company lowers the 'value'...it is cheaper pricewise by say a factor of 3 but the actual quality of the product is lowered by a factor of 10 or more, in materials, in manufacturing, etc..so the value is reduced massively, and it's cheaper financially in the short run on the price tag, but not cheaper in the long run, because the product fails much more often than the quality product and has to be purchased over and over again.
As humans we just see the price tag in the short term for all of it. Prices are easy to compare and are objective, value is much harder to quantify.
This is also part of Ubers business model of milking drivers as well, not out of money, but out of asset depreciation. The drivers just see the money they're making today, and aren't thinking about long term asset depreciation. So the less educated driver thinks they're making 20 bucks an hour, but in reality that driver is making like 4 bucks an hour after operating expenses, however, Uber advertises the 20 dollar an hour number in employment ads.
I haven't formed a complete framework for it but this idea of 'value extraction' is one way companies make money without raising prices.
The $28T figure consists of:
* ~$6T held by the Federal Reserve: https://fred.stlouisfed.org/series/FDHBFRBN -- this is money that the government owes, quite literally, to itself, made possible by the independence of the Federal Reserve, which has been buying government obligations to keep interest rates low.
* ~$7T held by foreigners: https://fred.stlouisfed.org/series/FDHBFIN -- this is money that will have to be paid to foreigners, over the long run.
* ~$15T held by US taxpayers, calculated as total held by the public (https://fred.stlouisfed.org/series/FYGFDPUN) less total held by foreigners (above).
Thus the US federal government owes $15T to taxpayers. If you have a bond index in your 401(k), then YOU are one of those taxpayers to whom the US government owes those $15T. The federal government owes money TO you. Your share is how much you will receive.
The social-safety-net figures in excess of the $28T are future obligations... also owed to, guess who? US taxpayers. If you expect to benefit from Medicare and/or Social Security in your old age, then YOU are one of those taxpayers to whom the US government owes those future obligations. The federal government owes those obligations TO you. Your share is how much you will receive.
The second thing you should do is note that talk of "unfunded liabilities" is a 10 year old debunked talking point that invites you to imagine future spending over an infinite horizon without setting it side by side with future revenue. Nobody will ever give you a clear, simple explanation of why you should think that way.
The third thing is take to heart some good points being raised here - debt is an investment in U.S. growth and not just a bad loan you are carrying around, the whole thing gets reframed if you consider what the U.S. is "worth", and probably many more after this post has been up for an hour or two.
I think articles like this really highlight the value of a place like hackernews. The instinct to tear apart assumptions and unstated premises is at its best in response to articles like these, so I tend to upvote these items even though I disagree with their framing.
Since the peak of the real-estate bubble circa 2007 (right before household assets dropped), US household wealth has more than doubled, while household debt has remained very tame by comparison.
The gain has roughly been $66t to ~$145t since 2007, in household assets. The debt increase has been $14.6t to ~$17.3t.
So nearly $80 trillion in added wealth, stacked against $2.7 trillion in new debt, over ~14 years. That's beyond extraordinary. You can hear the skeptics though: yeah, but that's bubble wealth; ok, chop it in half, $40t stacked against $2.7t in new debt, still extraordinary.
Over that time US households produced more new wealth than China did, to put that gain into perspective (and yes, most of it went to the top 1/3).
Also interesting, the debt of US states has shown no consequential increase in those 14 years. The total debt of the states went from $3t to $3.23t. That's another great positive for the US when it comes to debt (stacked against the growing federal debt mess of course). States fortunately often have restrictions on deficits.
1. https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...
https://www.truthinaccounting.org/news/detail/chicago-in-deb...
"Chicago in debt despite balanced budget and federal aid"
Well, yeah. I have a balanced household budget and a big mortgage (debt). It works fine.
"Chicago's annual revenue is $11 billion but its pension credit card debt is $33 billion."
Comparing annual revenue to total pension liabilities is silly.
(As is calling it "credit card debt" to make people think it's incurring 20% interest penalties. That's a deliberate choice to prompt a false impression when reading the article, IMO.)
[1] https://news.wttw.com/2021/07/07/chicago-pension-debt-increa... (Chicago’s pension debt soared by approximately $1.1 billion in 2020, according to the city’s audited annual financial report for 2020.)
[2] https://wirepoints.org/new-irs-migration-data-illinois-third... (New IRS migration data: Illinois third-biggest loser of people, biggest loser of incomes, to other states in 2019 – Wirepoints)
[3] https://www.nbcchicago.com/news/local/chicago-politics/illin... (Illinois Lt. Gov. Stratton Warns 20% Income Tax Hike Possible if Graduated Tax Proposal Doesn't Pass)
So, by about 3%, and about 10% of annual revenue. (In an... unusual year.)
Buy a house and chances are your debt soars by more than 10% of annual salary, right?
With an institution even a fraction the size of the US federal government, I don’t think people can reasonably collect, and instead the incentive to take care of current creditors is to give future creditors confidence that their investment is safe. Historically this allows the US to borrow at very low rates.
It's largely the FED, right? What prevents the FED from keeping the interests low, if the US-Gov does not want to pay?
https://www.thebalance.com/who-owns-the-u-s-national-debt-33...
My understanding is that the Fed buys treasuries at the market rate and does attempt to keep interest low that way by creating some demand at the current rate, but that it’s ability to influence the treasury rates is not as important as the perception that American debt is rock solid. It works by buying a small amount to “soothe markets” and keep other players interested, and is unable to create all the demand by itself without basically destroying the value of the dollar.
Disclaimer: I’m not an economist and probably have massive gaps in the details and mechanics of The US’s fiscal policy (or monetary when we talk about fed creating credit to buy treasuries).
I also recognize it is a real problem and we can solve it likely through policy/political will power. It in and of itself is not going to solve our problems.
And it's also true that it's pretty clear the US median wealth figure should be higher than it is, considering the vast average wealth figure in the US. The gap between those two numbers should not be as great as it is. And blatantly the bottom 50% of the population should have a lot more wealth than they do at present.
Maybe if the US had eg a good universal healthcare system (and no more medical bankruptcies), half of the country wouldn't mind so much that that median vs average wealth gap is what it is. Social contracts are important. You get this, they get that. As it is, the US social contract is not so great these days, compared to other affluent peer nations. The US has a large welfare state and gets a lot less for its spending compared to other peers. If our healthcare costs matched Britain per capita, Medicaid could instantly expand to cover 40-45% of the population for example, at no additional cost.
Printing money leads to greater inequality. Expect more of it.
Right now we are benefitting both from the stability of the US Dollar, as well as from the benefits of pumping more and more of it into the system (rising asset prices etc), if they lose the ability to maintain this balancing act it won't be pretty.
For example, let's assume a country of 10 where 9 people have $1 million and 1 person has $100 trillion. The inequality is massive but everyone has a great standard of living.
Treating things like Social Security and Medicare obligations as unfunded debt is akin to me declaring that I have a large amount of debt because I have to pay for food and clothe myself from now until I die.
It's money I will pay, most certainly, but it's only an obligation to myself to sustain my life at some reasonable standard. Much like Medicare and Social Security, it will be paid for with money I earn in the future as I live my life.
Funny how all the money given to Raytheon etc. to fund 20 years of Afghan war and nation building, and military bases all over the world never adds any debt!
The only government spending lobbyists and think tanks ever see is the spending that I might at some point see some benefit from.
IE. I own a house, which costs more than I make in a year. But the bank is not allowed to just email me tomorrow and ask for all the money, I have 30 years to pay it off with a set schedule I'm capable of meeting, so the actual amount of debt is pretty irrelevant.
https://vocalvoters.com?category=increased%20government%20sp...
Note, the current options are all based on who was willing to work with me. If you have any suggests happy to add.
https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent...
> The wealthiest 1% of Americans controlled about $41.52 trillion in the first quarter, according to Federal Reserve data released Monday.
Can't do it again as easily, of course.
Tonight.
The Zimbabwe government took the farms from their owners and gave them to normal people. Mismanagement of them lead to food shortages.
https://finance.yahoo.com/news/much-entire-united-states-ame....
It's interesting about how much is owned by foreign corporations and other entities.
basically we slowing turned our entire workforce into indentured servants to foreign "investors"
The entire point of the United States is for foreign investors to come to this continent and lever up on the resources here. That's how this reign started, culminated into the United States, and continued.
Over the last 600 years there was a brief moment when Andrew Jackson was like "hey stop that", and then 80 years later they all came back and got the second central bank formed and slapped his face on a $20 fiat bill for the lulz.
Its actually an ongoing gag, when you see it from that perspective.
https://www.youtube.com/watch?v=LxJW7hl8oqM
It's amazing how little the general public and especially our elected officials understand this.
Is this correct thinking? Asking for a friend. :)
In 2020, the U.S. government has spent 46.18% of the total GPD. Which means almost half of every economic activities in the U.S. were directly spent by the government.
I think it's a more interesting number than debt or taxation as you can immediately see how much the government controls the economy whereas debt and taxation are just technically playing the money supply at the end of day.
Even for Fiscal Year 2021 (which ends tomorrow), we won't have solid GDP numbers for a while, so that's at best speculative, and higher than most projections I’ve seen (most of which are down several points from 2020, which was a little below that.)
If the reference is to calendar year 2021 (which is the most natural unqualified reference), its even more speculative, as there is a day more than a full quarter of the year left.
> Which means almost half of every economic activities in the U.S. were directly spent by the government.
No, it doesn't. While GDP is the most common current measure of economy size, and may vary in proportion to total economic activity, it by design does not capture all economic activity. GDP measures end-purchaser value of production, not total economic activity. Lots of economic activity is (for instance) resale, which doesn't matter to GDP.
Sorry meant 2020. The number is from wikipedia and is not speculative as far as I know: https://en.m.wikipedia.org/wiki/List_of_countries_by_governm...
> Lots of economic activity is (…) resale, which doesn’t matter to GDP.
The government reported expenses don’t included internal resale as well. GDP and public spending will go to infinite if it does, I fail seeing why it’s relevant here?
The more debt the US government goes into, the more money there is to go around.
> The superficial similarity to a Ponzi scheme is that different sets of investors are relying on future investors, or at least future growth, to get paid back. But that defines a Ponzi scheme so broadly as to make the term meaningless. In that definition, any intergenerational transfer system is a Ponzi scheme.
> What makes a Ponzi scheme a Ponzi scheme is that it’s a giant fraud. People think they’re investing in postal stamps. Their money is actually being invested in nothing. In Social Security, conversely, it’s perfectly clear what is going on. Every year, Social Security’s actuaries release an insanely detailed report on the system’s finances, its balance of payments, the potential problems it could face, and so on. You can read their report here. In a Ponzi scheme, the finances are a secret, and that’s central to the enterprise. In Social Security, they are, as a matter of law, public.
Reminds me of the Ponzi that explicitly announced it was a ponzi scheme - kind of like a game of hot potato. You can profit as long as you're not the last one in. Or maybe that's just called crypto :)
A pyramid scheme guarantees returns, and those guarantees can, and will eventually, exceed the amount of money held by the scheme. Social security makes no such guarantee.
Social Security is basically a modified tontine. You pay in during your working life, and then receive payments at some age until you die. Like a tontine, the longer you live, the more payout you receive.
49/50 US state workers pension will run out of money by 2033 because they are purely run as 'guaranteed' ponzi schemes.
The exception is the state of Wisconsin which operates more like a tontine in the sense that the payments you can expect is adjusted based upon on the mortality of other members in the system.
I know this because I am making progress convincing governments and supranational organisations that the only sustainable pension system is the one we are enabling through our platform at https://tontine.com
Hyperinflation and passing the tax via watering down the money supply to the foreign investors is essential the same as default right?
Not if it wants to be able to borrow in the future... Look at what happened in 1978 - they had to issue non-USD bonds since foreign banks weren't willing to purchase USD bonds: https://en.wikipedia.org/wiki/Carter_bonds
This is like Brexit. It's really hard to predict what will happen as a result, but we know it's going to be both bad, and far reaching.
I strongly suspect that the Administration, Treasury, and Fed all have provisions in place for if this were to happen. The debt ceiling debacle has been getting worse every year, and given the events of 2020, it's not crazy to think that there is a real possibility of default. There are probably members of Congress who are hoping for a default, thinking it may cripple the country.
It's worth researching the bias of your source before taking it too seriously. Like jfengel said, they're using funky math. Oh no I'm over 2 million dollars in debt because over the next 40 years I'll probably end up spending that much money on food and housing.
The national debt itself is basically a fiction, it has absolutely no bearing on anyone.
What the fuck did we do?
The reality is that the Baby Boomers only cared about the deficit when they were paying taxes. Now they aren't (retired) so f it, let's spend on us as much as possible until we die.
> While a flat tax imposes the same tax percentage on all individuals regardless of income, many see it as a regressive tax. A regressive tax is one in which the government taxes high-income earners at a lower percentage of their income and low-wage earners at a higher percentage of their income.
> The tax is seen as regressive due to a more significant portion of the total funds available to the low-income earner going to the tax expenditure. While the upper-income payer still pays the same percentage, they have enough income to offset this tax load.
Cutting spending never seems to involve military or police or coal subsidies...
"Welfare" doesn't exist anymore: https://fivethirtyeight.com/features/most-welfare-dollars-do...
Fire anyone in government who overspends? OK, how do you define overspending?