US debt: Federal interest payments could soon exceed military spending | Hacker News Reader

US debt: Federal interest payments could soon exceed military spending

cnn.com

59 pointsjanandonly121 comments

Keep in mind, things are not as simple as some talking heads would have you believe:

* More than a fifth of the treasury bond debt owed by the federal government is owed to... none other than the Federal Reserve, which is financially part of the federal government. Every year, more than a fifth of the debt interest payments made by the US Treasury go to the US Federal Reserve, which dutifully sends them all back to the US Treasury every year.[a]

* If you own any US treasury bonds (whether directly, in a 401(k), in some other kind of retirement or pension plan, or in an index fund), that's your share of the US national debt: It's the amount the federal government owes you.

* A dollar is an obligation of the US government, backed by its full faith and credit, just like a treasury bond, but unlike the bond, a dollar pays no interest. When the Fed buys and sells treasury bonds in the open market, it exchanges non-interest-bearing US obligations with interest-bearing ones.

Our financial system is more complex than most people grasp, due to a general lack of education in and understanding of macroeconomics. Be very wary of simple, seemingly obvious, morally appealing narratives. Usually, they're not even wrong.

[a] https://www.wsj.com/articles/higher-interest-rates-fuel-loss...

For the first point, why isn't that debt just cancelled?

Cancelling bonds owed to the Fed would be literally money printing. When the Fed owns bonds, they can be sold on the open market, or allowed to mature, both of which are a form of quantitative tightening.

Makes sense, thanks

The fed is not a part of the US Government financially. When the fed receives cash, it is destroyed. It does not go back into treasury coffers.

Cash received in the form of interest payments (income) is sent to the US Treasury.[a]

Cash received in the form of principal payments is "destroyed" (by debiting outstanding assets with corresponding credits to outstanding liabilities in the Fed's balance sheet).

[a] https://www.wsj.com/articles/higher-interest-rates-fuel-loss...

And if one ponders this dynamic for long enough, one realizes that there is not enough money in existence to pay all of the debt in existence. Or in other words, a pressure cooker type system of infinite growth is created. By no fault of their own, a certain number of debtors are guaranteed to default on their loans - the pressure cooker rat race. And in practice the next traunch of currency created through debt in say, a 10 year period, is necessary to pay off the previous 10 years of debt that otherwise would not have enough currency to pay off - the 'infinite' growth dynamic.

In this system the only thing worse than creating more debt (currency) is to not create more debt (currency).

I may be misunderstanding, but from the linked article:

> “We’ve returned close to $1 trillion to the Treasury over the last 10 years. We did not keep that revenue in the Fed,” St. Louis Fed President James Bullard told reporters last month.

The interest paid on debt is not destroyed but the principal is destroyed.

https://fred.stlouisfed.org/series/FDHBFRBN - for the exact number.

To add a sarcastic comment, the US could just increase its military spending to outspend the interest payment then to solve the issue.

I had no idea members of Congress browse and post here on HN!

This but unironically. The 355 ship navy and 386 squadron air force won't build themselves. All those HIMARS, NASAMS, Stingers, Javelins, and counter battery radars we sent to Ukraine also need to be replenished.

The vast majority of our defense spending is Salaries for US Service Men and Women. And they are under paid in many cases. Just bumping the salary of the bottom ranks would likely shift the spending ratio.

(you can verify this by digging into the monthly treasury statements: https://fiscaldata.treasury.gov/datasets/monthly-treasury-st...)

Can you elaborate? What you wrote seems to contradict this source:

"Roughly one-quarter of the Department of Defense’s budget is for military personnel."

https://www.cbo.gov/topics/defense-and-national-security/mil...

I looked closer, and it seems my memory is either bad or the levels have changed since I last dug into those numbers. In either case, thanks for checking those numbers!

Or even more radical simply stop issuing Treasuries and just run an overdraft with the Fed.

Paying interest is entirely a policy choice. Congress can change the rules of the game if it wants to and can stop paying anything.

After all what is the justification for paying banks and financial companies additional interest income when benefits and pensions need uprating?

> Or even more radical simply stop issuing Treasuries and just run an overdraft with the Fed.

> Paying interest is entirely a policy choice. Congress can change the rules of the game if it wants to and can stop paying anything.

Simply destroy the credibility of the US to pay its debts.

Stopping issuance of new Treasury debt, and getting the Fed to just monetize IOUs wouldn’t invalidate existing debt notes (unless the Treasury just “paid them out” with the newly created money.)

No, it would simply destroy the existing “value” of the currency, just as in all cases of debasement in history.

How would it do that when currency is just another type of debt note.

There are no silver coins any more. You can't debase something that has no base.

People either save or spend. If they spend then it is taxed, and tax withdraws money from the system solving the problem.

The problem is excess savings. We don't need to pay people to save.

https://en.wikipedia.org/wiki/Debt_jubilee

The empire declares a jubilee. The financial world requires the good graces of the empire, and the empire continues to make the case that its continued dominance is necessary for world peace (which is arguably true). The calculus then for world finance cartel is to determine whether future profits under new global management post-empire will exceed future profits with empire minus a major write off of debt.

As to US's credibility, let us recall that credit worthiness is set in the West, and, should the empire continue to exist, those who object to US's AAAsuper+ rating by the financial world can go and trade with North Korea and stop buying US bonds.

The energy trap of Petrodollar is now effectively busted (see progressively more negative press on KSA in US over the years culminating in the recent spat), so empire will need something else to create demand for US dollars for payment. Possibly chips? Food?

Which is why there is a slow simmering world war brewing. Everyone knows where this is going. Something has to give. Either the empire and global order du jour, or, the restructuring demands of emerging powers in the developed world + a sore ex empire.

p.s. btw Polyani's The Great Transformation discusses the role of the financial system and world order and the ambiguous but symbiotic relationship between powers and banking, and world order, right at the introduction.

https://en.wikipedia.org/wiki/The_Great_Transformation_(book...

How would it destroy anything?

For every debt there is a matching asset by accounting identity. When the asset is spent it creates a flow of taxation that precisely matches the debt for any positive tax rate.

That's a simple geometric series a 15 year old can do. Get a piece of paper and work it out and you'll see.

Who has the second biggest Fort Knox? Let’s just send the military there and take the profits to offset our debt. Easy.

The worst part is, what did we get for that $31 Trillion in debt and other spending? Are we any better off?

Did we convert to a clean grid? Connect every city by rail? Fix every road and bridge? Fix healthcare and education? Reduce crime to a minimum? Reduce homelessness to a minimum? Did anything improve materially?

Did we... do anything constructive and meaningful with that $31 Trillion?

Nope! The national (and state) regulatory bodies also tend to get in the way of such improvements as well: they make those efforts more unlikely, even as more and more money’s spent.

https://fiscaldata.treasury.gov/americas-finance-guide/natio...

You can start by learning what the national debt actually is.

Aren't the largest parts of the federal budget Medicare/Medicaid and Social Security? I think that's money well spent.

Is it? It feels like something is broken. The government spends nearly a trillion dollars a year on health related expenses. They should be investing aggressively so that a trillion dollars in health related expense aren't needed forever. It seems totally unsustainable. The US is going to need cheaper, more effective health care to keep Medicare/Medicaid/VA Hospital programs solvent.

> Did we convert to a clean grid? Connect every city by rail? Fix every road and bridge? Fix healthcare and education? Reduce crime to a minimum? Reduce homelessness to a minimum? Did anything improve materially?

Maybe the misconception is that these crises are exclusively caused by low budgets.

For example, rail transport might be worse in many ways than cars. Or maybe some roads are impractical to maintain, and must be demolished. Or maybe homelessness is a symptom of inequality, and whatever its underlying cause is, large direct payments will not address it.

Unfortunately, politicians in the US lack the foresight and willpower to enact any of those changes because that would necessitate foregoing short term gains. Even if we pulled another $31 trillion out of thin air, none of these problems are getting fixed. Anything that takes longer than four years has a hugely diminished chance of getting traction and that is not going to change in the foreseeable future.

4 year cycle, 2 parties. It's by design.

And yet there’s an interstate system, collection of national parks, and space program. It can’t be by design if it hasn’t always been this broken.

I wouldn't lose to much sleep over it. It's going to feel like only $25 Trillion in debt in a few years, thanks to inflation. ;-)

Rich doctors.

And relatively wealthy seniors who spent their social security going to rich doctors.

They built a lot of bombs, then proceeded to sell them to friendly regimes and drop them on others. Of course, after the bombs are dropped and the regimes are replaced, the bombs are sold to the new regime.

Hegemony ain't cheap.

The $31 trillion is the debt - the difference between federal income and federal outlays. The actual federal outlay was significantly higher.

I know your last question is rhetorical but consider the work of NASA. Would you call the Mars rovers constructive and meaningful? What about the James Webb telescope?

We also spend a lot of money stabilizing the agricultural market to maintain a steady food supply. Is that constructive and meaningful?

What about all the medical research we fund? Is that worth it? After all that research has led to the discovery of cures for various cancers and has saved lives.

It should also be duly noted that Joe Biden and the Democrat-led Congress has been able to do something that hasn't been done in over 40 years - they got an infrastructure bill passed and it was quite comprehensive.

All your questions, even if rhetorical, point to why elections matter.

If this were a really pressing problem, the dollar wouldn't be such a strong currency. It is a problem, but we had balanced budgets in the '90s and there are many ways we could do that again: - Start bringing back some of the taxes we had in the 1950s, when the country actually grew faster. - Make people pay sst up to a higher level of income and / or means test the benefit. - Don't spend like $3T in forever wars like Iraq and Afghanistan. - Let Japan and Germany pick up more of the defense bill. As an American, I actually don't like this idea much. How about: Let an inevitable recession in China and emboldened NATO be the cause of military reform to save costs.

All sides of the political spectrum do this but it’s hilarious to me the “The 1950’s were amazing and we had high income taxes!” and ignore all the other things - like the entire world was bombed to shit and the seeds of stagflation were planted then.

How do you link the 1950s to stagflation? Are there any articles on this idea that you recommend?

Not op, I’d have to look. Generally though the seeds of a downturn don’t happen then, they happen during the boom times, when everything seems great.

It’s the biggest issue I have with Keynesian school of thought: the answer to get out of a downturn is to gov spend more, but it ignores what happens in the boom times (in which gov also spends more these days). Meanwhile growth, even in good times, has been slowing. Used to be 3-4%/year 30 years ago, more like 1-2% now. And still the calls are for spending more. I don’t know when exactly we’ll stop growing altogether, could be 100 years from now, but with all the gov spending, we sure want to find out!

Well, the entire rest of the industrialized world was bombed to shit and the US was not only untouched but also had been ramping up production as much as possible for 5 years. It's pretty much an ideal situation for a large economy when all of your competitors have destroyed each other and now everyone has to look to buy their rebuilding supplies from you.

> Start bringing back some of the taxes we had in the 1950s, when the country actually grew faster.

There's no common sense reason this would reduce government interest payments.

There are many common sense reasons it would specifically not impact interest payments. For example, if we can carry the interest load on the current tax base just fine, increasing taxes will cause spending to rise, not stay the same. Also, if rising taxes are perceived as anti-corporate, bond prices will fall, and interest payments will rise anyway.

> Don't spend like $3T in forever wars like Iraq and Afghanistan.

One perspective of the military is that it is welfare that is acceptable to Republicans. The vast majority of that cash was spent in the USA. You can make a tired reference to moving cash overseas, however many billions it was. But you are ignoring the main point.

> Let Japan and Germany pick up more of the defense bill.

What if military spending were welfare, for the most part?

Like 999/1,000 DoD employees will not be in a meaningful defense or combat role.

What if you live in a shithole and life was shitty and you needed an out? You join the military.

What if you're just broke? You join the military.

It's culturally acceptable welfare for the vast majority of people.

Social media has robbed people of their common sense.

>> There's no common sense reason this would reduce government interest payments.

When you run a budget surplus, you pay down debt. When you have less debt you pay less interest.

You are like bringing back the Laffer curve to argue that maybe raising taxes wouldn't reduce debt. Historically it generally has, logically it would.

How is it possible to even begin to repay $31 trillion? What kind of budget surplus would help put a dent into interest on that amount? That number is bigger than the entire annual GDP, let alone budget, let alone any hypothetical budget surplus.

Eh, the last budget surplus we had was in 2001 (a hair over 100bln). And while it'll be impossible to sustain that without politicians carving out what they want out of it, the 90s were a period where we sustained or crept our total debt load down ever so slightly, at least before 9/11.

The dollar, in many ways, is such a strong currency because we pick up the bill for world policing, and also we are the ones to police it. Which also explains why we continue to spend heavily on military. And just looking at DXY, anyone of [political/economic] consequence looks like they're ahead of us in the race to the bottom... For now.

a nice graphic of current US govt spending. https://www.usaspending.gov/explorer/budget_function

Not very nice on mobile. I had to turn to landscape to even read the labels, which compressed to entire page to half of my screen.

Very cool site. Thank you very much. I have always used usafacts.org to view spending but after I quick glance I think the site you linked is much easier to view and understand.

Crazy how everyone always talks about of defense spending yet its not nearly the 50% I've been told.

If you tell a lie enough times, it becomes the truth.

Wake me up when federal interest payments exceed the amount the feds spend on social programs, which far far exceeds the defense budget. [1][2]

[1] https://usgovernmentspending.com/united_states_fed_spending_... [2] https://www.nationalpriorities.org/budget-basics/federal-bud...

> If you tell a lie enough times, it becomes the truth.

What's the lie supposed to be here?

It's typical journalistic manipulation. It's a garbage article meant to do two things. Scare people and tug on the belief, which is confirmed in these comments, that the US spends the most money on the military.

> Scare people and tug on the belief, which is confirmed in these comments, that the US spends the most money on the military.

I just don't see where the article stated or implied that military spending is the largest spending category. It noted that interest spending has surpassed VA and transportation spending, is around the same as education spending, and may soon surpass military spending. That doesn't mean military spending is the largest category any more than it means VA spending is the smallest category.

I wouldn't classify ~4/5 of the total as "far far exceeds". That's 80 to 20.

From your source: "By far, the biggest category of discretionary spending is spending on the Pentagon and military. In most years, this accounts for more than half of the discretionary budget."

And discretionary spending is a quarter of the total budget.

The fact that you do not understand what discretionary spending is in the federal budget proves johncessna's point.

These sorts of articles dont reflect how the US gov funds itself:

1. Gov spends $100 and taxes $90

2. Commercial banks then have $10 (100-90) in reserves at the Fed

3. Treasury is required to sell $10 of bonds to keep its account at the Fed at zero balance. (This collective tally of 'debt' is what everyone loses their minds over)

4. Commercial banks buy these bonds up immediately as long as the interest earned on the bond is greater than the interest earned on the reserves at the Fed.

Important things to remember:

- The $10 'borrowing' done by the government is funded by the deficit it created.

- The treasury doesn't have to issue bonds to fund itself it can simply deficit spend as its done in every major war or during Covid.

- When the treasury does choose to issue bonds the coupons dont need to match market interest rates (this is what the Bank of Japan is doing this very minute). The bonds will always be purchased so long as there is a positive interest rate differential between the bond and the Fed's reserve interest rate.

- Bonds have secondary uses but funding the government is not one of them.

- Government debt = private sector savings. Collectively it represents the excess of money paid into the pvt sector vs whats been taken out via taxation.

- US gov bonds are extremely useful financial instruments used in all sorts of repo operations providing liquidity in the banking sector. They are better than gold!

- Dont stress about government debt. It has never, and will never, be repaid and thats a good thing because it effectively translates to a massive destruction of pvt sector savings.

That payments are increasing is not good, but the US owns its debt in dollars, which gives a lot of flexibility in the long term to do all sorts of shenanigans since the US controls the dollar supply.

Such shenanigans will continue to make the dollar less appealing as a reserve currency.

> shenanigans will continue to make the dollar less appealing as a reserve currency

Good. It distorts our trade and provides marginal benefit on the borrowing front, given a non-reserve dollar would be similarly demanded on account of our massive consumer market.

I support it ending too, it will just mean the beginning of much harder times for Americans. Our 'massive consumer market' is propped up by these shenanigans since our manufacturing base has been eroded.

Which would mean more spending and less saving - increasing transaction flow and leading to higher dollar profits and higher taxation in the US.

People holding dollars in reserve is what is causing the deficit.

How is doing more shenanigans good here?

Good would be cutting back on spending in real terms. Neither party’s interested in that though

That’s good right? If people want to lend us money at sub-inflationary rates to finance our own growth and prosperity, that seems better than shoveling it to defense contractors who are mostly building weapons to fight the types of wars that we don’t have anymore. And the conventional wars we’re well prepared for I’m mostly fine without.

I’m not one of those nutters who thinks we should castrate the military, but it’s insane to think the level of spending we have is not way higher than needed.

Raise federal income taxes rates and create additional tax brackets. Or, better, replace discrete tax brackets by a monotonously continuously increasing function t=f(x), where x=taxable income and t=effective tax rate. The function could have certain properties such as t>0 for all x>standard deduction, t=0 for x<standard deduction, lim t (x->infinity) = 0.5 or something like that, and df/dx > 0 for all x > standard deduction.

My always-unpopular opinion on this is that way, way too few Americans actually pay any Federal income tax.

60% of households will pay some Federal income tax this year. https://www.cnbc.com/2022/10/28/more-than-40percent-of-us-ho...

The ones that don't - almost entirely low-income households - spend essentially every penny they earn. Taxing them winds up being more of an economic drag than anything else, and increases need for government assistance. Taxing them is fiscally irresponsible.

30% of households in the $50-75K income range will pay no federal tax. Are you defining those as "low-income households"?

Yes, a household making $50k in some areas of the country with a couple of children will absolutely be in the low-income realm that spends every penny that comes in.

This is a symptom of the disease of extreme wealth inequality. If all of the profits are made by just a few people, it makes sense that very few will be involved otherwise.

This is absolutely weakening the country, and it would be far better if less wealth inequality existed and more people could afford to pay taxes.

This is a symptom of the disease of extreme wealth inequality.

No it's not, it's a symptom of the way the tax system is set up.

You can have 40% not paying any income tax no matter what your inequality is.

It’s both, because there is pressure on the tax system to collect more from the fewer remaining earners.

"Fewer remaining earners"? There is no change in earners unless they aren't making any money.

You’re talking about billionaires, right?

No, it's the lowest income earners who pay 0% income tax despite people screaming about how "unfair" the tax system is.

The US tax system is highly progressive in terms of rates.

If you ignore deductions.

Nope. The IRS publishes effective taxes rates for income quintiles. The effective rate goes up as you go up in income.

It is true the effective rate is lower than the statutory rate for a given bracket, but that's true for all income levels.

Are you saying we should be taxing people who can barely afford to put food on the table?

I think the basic point is that no-one believes that 40% of all American households are in the "can barely afford to put food on the table" category; and that it's hard to have a well-functioning national democracy if some significant fraction of voters are not invested in funding the national government.

I believe it.

https://www.cnbc.com/2022/03/08/as-prices-rise-64-percent-of...

> At the start of 2022, 64% of the U.S. population was living paycheck to paycheck, up from 61% in December and just shy of the high of 65% in 2020, according to a LendingClub report.

The definition of "living paycheck to paycheck" is "couldn't meet their financial obligations if they lost their job". This is nothing at all like "can barely afford to put food on the table".

Not quite; it's "immediately couldn't meet their financial obligations", i.e. no significant savings. Again, that means every penny they earn is going back out into the economy.

This is the same survey that says that 36% of consumers making over $200,000 also live paycheck-to-paycheck, right?

>The US tax system is highly progressive in terms of rates.

The most progressive in the developed world, I think?

A function like that would be hard for most people to understand/calculate, and you can approximate it pretty well with a couple extra tax brackets.

Luckily they make machines that were good at performing mathematical calculations and which were so ubiquitous that everyone has ready access to them and most people have at least one on their person at any given time.

The tax bracket system has proven to be a confusing system which is hard to adjust properly and handles the long tail of extreme wealth very poorly. It is a compromise between efficacy and simplicity that achieves neither. In this day and age, easy calculability ought to be a very low priority goal.

People have to get used to socialism first, THEN hit them with higher taxes after it is too late to turn back.

This is a weird one.

On one hand the US massively over spends on "military spending", partly because it over spends and partly because a whole bunch of weird (corp) welfare and jobs programs (and things like research too) are incorrectly classed as military spending.

But also the US has way way too high a debt level for no actual reason (just under taxing special groups, no real wartime costs, no amazing jump forwards on infrastructure or social capital etc).

What's not to hate?

Functionally, the US has such a huge debt level because borrowing costs were so low for more than a decade. Rising debt payments are the signal that will, on decadal scales, force the US to pare back borrowing and raise taxes.

(Raising taxes will probably also slow the economy, encouraging the Fed to lower interest rates, and the cycles cycle anew...)

I think for other countries that would be very and rapidly true. I wonder how it will be for the US. It's one force for sure, but I think the US (with it's economic size and "credit history" and high demand for USD) will be able to ignore it for quite a while...

Arguably the US sells so much debt because there's a hot market for it; the question is will it be a slow cooldown as that market begins to go away, or will it be a sudden shock with all the associated fun?

You could argue that the massively inflated military budget is why we can sell so much debt, but any simplistic version of the story is likely to be wrong in key details.

The US was in multiple fronts from 2001-2022, and estimates are that direct costs from 1 of those fronts (Afghanistan) is 8% of the total debt.

Almost ⅓ of the total US debt is the result of Covid Spending and Tax cuts in the last 5 years. (Social capital)

We are currently fighting five wars:

https://en.wikipedia.org/wiki/Insurgency_in_the_Maghreb_(200...

https://en.wikipedia.org/wiki/Operation_Enduring_Freedom_%E2...

https://en.wikipedia.org/wiki/American_military_intervention...

https://en.wikipedia.org/wiki/American-led_intervention_in_t...

https://en.wikipedia.org/wiki/Yemeni_Civil_War_(2014%E2%80%9...

We were fighting two more prior to the Biden presidency: https://en.wikipedia.org/wiki/American-led_intervention_in_I...

https://en.wikipedia.org/wiki/War_in_Afghanistan_(2001%E2%80...

We're also paying for the war in Ukraine and we're still paying the costs of previous wars in the form of mass illness (both physical and mental) experienced by our veterans.

Did the US ever sign a peace treaty with North Korea? Maybe no fighting at the moment, but a war is a war!

There was an armistice. The wars I listed are one's where the US is currently dedicating resources (e.g. drones) to an armed conflict.

> and we're still paying the costs of previous wars in the form of mass illness (both physical and mental) experienced by our veterans.

we aren't even really paying that - at least not at the extent we should be.

FYI, Tax cuts and Covid spending are not social capital, they're just tax cuts (and free cash).

Social capital is things like education, healthcare, equality etc.

I think we agree about actual spending on wars being small and necessary spending on necessary wars being basically zero over that period...

The US massively over spends pretty much everywhere. Healthcare? Yup. Space? Yup. Government salaries? Yup. New toilets? Yup. Propaganda? Yup. I'm not even touching on the massive amount of fraud our handouts have or all the no bid government contracts given out to donors.

Take out military over spending (~15% of the budget) and you still have massive over spending in ~85% of our budget.

We need to tackle to massive over spending at its root (our elected and non elected government officials) not at a symptom of the root issue (military over spending).

Look at it like this. If we look at everything, over spending would be reduced in our entire budget. If we just focus on military overspending, over spending would be reduced in 14% of our budget. But as nothing else is reduced there will be no real change. Slowly overtime the over spending will creep right back into the military.

There is no logical argument to be made for only targeting military overspending. It makes a good political talking point but that is about it.

"No generation can contract debts greater than may be paid during the course of it’s own existence." (Thomas Jefferson, https://jeffersonpapers.princeton.edu/selected-documents/tho...)

Our current debt:GDP ratio is ~ 125% these days, so I don't think there's any danger of being unable to pay during this generation.

Up to congress to balance budgets. Markets will force their hand if they have to (see England).

Maybe a balanced budget amendment would set things on a sustainable path, but no neo-conservative, neo-liberal, or MAGA supporter would let it pass. If the fall of the Roman Republic is anything to go by, we're at the point where senators are raiding the treasury.

"Maybe a balanced budget amendment would set things on a sustainable path"

If for sustainable you mean a complete collapse of the economy as excess savings and excessive taxation drain the flow of money.

balanced budget amendments cripple a government's ability to respond to economic crisis

If Keynesian economics are anything to go by, looking at US budget deficits, there's been a non-stop economic crisis for the past 20 years.

https://www.statista.com/statistics/200410/surplus-or-defici...

"Markets will force their hand if they have to (see England)."

That didn't happen in England (The UK actually - England is California in the United Kingdom).

Markets are servants not master. And you cannot 'balance budgets' if you allow savings in the denomination. The accounting won't allow it. For somebody to save somebody else has to borrow. That's why you end up 'in credit' at the bank. The bank is borrowing from you. Presumably you don't want your bank to balance its budget and confiscate your 'in credit' balances.

"That didn't happen in England."

That is precisely what happened. No market buyers for GILTS because tax cut play jeopardized future debt obligations by the government.

There's always market buyers for Gilts. GEMMS are required to make two way prices in all market conditions as a conditions of their access to the Debt Management Office.

Lots of areas to cut spending, but naturally not even considered, even in comments here.

Also this is just us national debt right? There’s still each state’s own debt, and cities therein

Hey guy, why don't you spend a bunch of money, you know for saftey and stuff and then we're going to raise the interest we charge you, sound good fella?

And who gets all those interest payments?

oh, no worries...

as I've been told many times: we owe it to ourselves...

The more interesting issue here that is not mentioned is that when you include the most conservative estimates on unfunded liabilities (medicare into the future, future medicaid, future social security, other legislated obligations into the future) with this current budget mentioned in the article, you arrive at totals that put the debt load above the total federal tax receipts inncomung. Luke Gromen has done the math on this and like many things with the USA govt you won't find this specific number but based on other specific govt given numbers you can do the math yourself but basically we've past the point where you need to take out debt to pay previous debts on the federal level.

Look at Japan, to see what is future for US.

I'll just be over here walking in this forest.

Don’t do that.

That is your choice, but sunrise and sunset is always nice)

In regard to what?

Unlike Japan, the US has a health immigration flow coming in.

It's not the same at all.

The problem with your line of thinking is three fold.

1) remittances. While the US does import a lot of people, the economic benefit to the nation is greatly reduced by remittances.

2) Immigration is an ebb and flow type thing, during good times people run to the US but during bad times? There have been several years where the H1B quota was far from reached.

3) Depending on immigration for your long term future is risky. Other nations compete for them, and as the situation at home improves this reduces the advantage.

My country (Canada) is hooked on "immigration is our future" as well.. But there is negative news about this approach recently.

India newspapers have been running stories about how Canada only wants "low cost labour"...

If this continues, will Canada be able to attract people?

Reply on news.ycombinator.com