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Cake day: June 15th, 2023

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  • I think you just made my point, but harder. Debt is actually great for “the lenders,” i.e. whoever buys treasury bonds. If the government wants to spend money on something, they have to issue a bond. The bondholders are paying for it. If you run out of bondholders, you have to increase the interest offered to make it more appealing than other investments.

    It’s not just “moving numbers on a ledger.”

    That would be essentially the same as printing more money,* which is what leads to hyperinflation and the collapse of economies. The higher the total debt, the more taxes go into paying interest on debt, rather than services (the nurses and water engineers mentioned above). There is a whole other discussion on where that spending on services spending should be prioritized.

    Where does that Tax money go? Obviously it’s a payment to bondholders, which are generally wealthy individuals, corporations, or nations, but can also be held by the US Government (maybe that’s what you mean by “moving numbers on a ledger?”).

    Who owns US Debt? [pie chart]

    Edit: source

    *The Fed does change the money supply through interest rates, which can generate inflation.