In US Bonds... It doesn't matter who holds it, the pay out is fixed... I don't know why you think it makes a difference who holds it. It is a sign of confidence in the USA if you can sell all your Treasury bonds.
Sometimes it goes up, sometimes it goes down. For example the percent of debt held by foreign countries as a percent of GDP (which is what matters) is lower now than it was ten years ago.
I never claimed there would be a debt crash, I simply said something has to change and you disagreed. Presumably that means you think 6% deficit growth combined with 2% GDP growth is acceptable in perpetuity. This means that money sent overseas as a percentage of GDP and the federal budget will rise with time. I think that’s bad.
Wouldn't happen, that money would just go to Elon, Zuckerberg, Bezos, etc as tax cuts and the debt would still be every bit as bad.
Well it absolutely can continue forever and that’s just logic. After all, you could loan your wife an unlimited amount of money with zero effect on your household finances.
Speaking of tiresome, this analogy. If I loan my wife money at 4% (~the long term treasury yield) and my income goes up 2%, I go broke. But actually I’m the government so I can print money, which inflates its value away and does so at higher rates the more I’m printing once debt service ratio is high vs GDP. My wife and I are great but we’re greedy so my kids are fucked.
10 year US TIPS is like 2.06% I think the USA can afford that without going bankrupt.
Those are not the only bonds the US sells, and also the rate on those is misleading anyway. The 2.06% is on top of inflation. When the bond becomes due its face value will be taken to be higher by whatever inflation was over that timeframe.
Well I’m not sure how your household operates but if it operates like the average American household my analogy is perfect and you know it.
I own plenty of US treasuries, they definitely help me get further ahead of the many struggling people who can’t afford to hold government debt.
Correct. Modest, sustained inflation is good for the average person as the average person is a net debtor and inflation reduces the real value of debt. As for what rich people prefer they push for lower inflation because they have advisors who inform them of this.
Maybe a better way of making my point is that my example of 6% debt growth combined with 2% GDP growth, which you say can continue indefinitely, will eventually result in interest payments on the debt making up 100% of all economic activity. I am too lazy to calculate when but the math is simple and that is the end result. So what changes to make that result not happen? Obviously things break down far before that.
Lol, if we weren't paying interest on that debt we'd have another carrier battle group, not more solar panels. Policy issue, not funding issue.
www.nbcnews.com
The debt clearly doesn’t matter to you. Trump increased the deficit by 50% in 1st term BEFORE COVID spending yet you voted for him anyway.
What exactly has he done to make you think he's on a different trajectory?
The best part will be when it's four years of 'let's see how it all plays out before criticizing' followed immediately by 'he's out of office so let's move on'. (assuming his next coup attempt is unsuccessful, of course)
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