Well, since the billionaire class doesn’t pay it’s fair share of the tax burden, that money has to come from somewhere.
This is a popular thought, but even if we take 100% from the billionaires it pays for almost one year for the US.
While I understand what assumption you’re running under no one said for only billionaires to pay. The idea is progressive tax brackets the less you make the less you pay percentage wise. We also need less loopholes for the people that can buy lawyers and manipulate their funds to get out of paying what they should. There is no reason companies and the extremely wealthy should be paying an effectively less tax percentage than the diminishing lower middle class.
It’s not about only billionaires paying, it’s about them not being a magical money source. A higher rate might feel better, but it’s not solving government revenue problems.
Now imagine if we had taken 30-40% from billionaires every single year… hmm…
We could have a couple year of almost not having a deficit.
Countries can print money. If the debt is denominated in your own currency you will never not be able to pay them.
I get your point, but they cant just “print” currency so we could actually not be able to pay when people/countries stop buying the bonds or lose faith in the system.
No, that is not true. That states sell bonds is a self-imposed rule.
As long as a state collects its taxes in its own currency there will be demand for that currency.
What happens when they run out of people to sell bonds to and they run out of money to tax?
Then stop selling bonds and start investing directly (build schools, repair bridges, pay your employees, etc.).
Countries don’t have to take the detour through state bonds because they can make money out of thin air. State bonds are a self-imposed and there’s no law of nature that mandates using them.
How do they make money out of thin air?
Serious question? Money today is nothing more than a number in an account. When a country needs more of its own currency, it can increase it’s account by that amount.
No they cant, that is illegal. You could say they will change the law so that they can do that, but that is not possible (in america) at this time.
This.
More people need to understand that the debt of a sovereign nation isn’t analogous to that of a household.
Public sector debt is private sector surplus.
The current American debt is more than the current GDP. That would be fine, if we were paying it down, but it’s growing faster than ever.
It would also be fine if it was healthy debt. Debt taken to improve infrastructure in meaningful ways, improve education, shit, even a war debt to create an old school tributary state (economically speaking).
And it would all be fine if everyone in the room were adults, and there wasn’t a significant portion of America actively and willfully trying to cause governmental collapse.
The American citizen, on average, will spend $37,000 in the next decade to pay the interest on that debt, $12.4 trillion in total.
All without universal healthcare mind you. Or, on average, a reasonable retirement age.
You need to start asking yourself whether the people who keep assuring you not to worry your pretty little head about the APR on your loans, and they are ultimately partly your loans as a citizen, are actually acting in your interest.
Your comment stems from a fundamental misunderstanding of public institutions and how money works.
It doesn’t matter that the debt is higher than the GDP if it’s debt in the currency that the state creates. Japan has a debt of 250% of the GDP and it’s always going to pay for it. Why? Because it’s in Yen, and the Japanese public sector is the ONLY institution in the world capable of creating Yen. If they wanted, the Japanese central bank could quite literally perform 100 keystrokes on a keyboard, and repay all debt early tomorrow, at a cost of exactly 0 yen to the taxpayer.
Taxes aren’t the way a state funds itself. Again, the state creates its own currency, why would it need tax collection to get that currency if it can create it at will at a keyboard’s stroke? Taxes serve many purposes, such as forcing people to use your currency in the private sector (they will need that currency to pay for the taxes so it’s the one they will use), such as disincentivizing certain behaviours (tax on tobacco for example), or such as reducing inequality (progressive income taxes), or also importantly, removing money from the private sector to reduce or prevent inflation. But the one thing taxes don’t do is funding the state budget, since the state’s budget is unlimited in theory. There are practical limits, but availability of currency really isn’t one of them.
The American citizen won’t spend a single dollar paying back state debt, in fact it’s exactly the opposite. The state creates the currency with which it pays back the debt, and it’s private citizens and corporations who the state owes the interest rate to. If you buy a bond for $1000 at an interest rate or 3%, next year you’ll have $1030. The state, through debt, literally creates money for the private sector. It makes people and companies wealthier. Taxes make people and companies poorer, but taxes and debt are completely unrelated to one another, since the state really doesn’t need taxes to pay the debt.
I fully agree with your analysis of the poor usage of the state budget and people not getting the welfare state they deserve by right, but that’s not something that has to do with debt, it has to do with the government representatives not acting for the benefit of the majority but a select elite of capitalist owners. Debt is purely a financial tool that serves purposes such as creating money, or controlling the interest rates of the country so that people and companies will take more or fewer loans, which has an effect in the economy.
Thank you for typing up the reply I hadn’t gotten to yet.
You the real MVP
Public sector debt is private sector surplus.
Yes! This is the very essence of our monetary system that nobody seems to understand.
The other person who responded to me made a very all written post but it gets a core assumption completely wrong.
They seemed to think that tax revenue in some way has to happen for spending to happen. That’s why they think GDP has anything to do with our ability to service debt. But the federal government creates money ex nihilo.
Money has to be created before it can be destroyed through taxation. Spending and back stopping creation of money by private banks through the reserve system comes first. You can’t destroy something you haven’t created.
It’s sad, really. Economists and politicians have blinded everyone with what I think of as “the money delusion”.
It doesn’t matter if the money can be “gathered up” to be spent on things we need. We do not rely on the money of the wealthy. What matters is actual, real resources and services we can provide.
The national “debt” is a misnomer. That’s the amount of dollars left in circulation that have not been destroyed through taxation, as well as the “dollars” that pay interest which we call bonds.
I’m glad to see at least a handful of other people who understand. Fight the good fight, fellow human.
-1000 social credit for questioning government
We ain’t China…. Yet
A social credit score would only harm the bad people
Who decides what’s bad and what’s ok?
The same system which makes laws
You mean the system that makes it illegal to have an abortion or to marry the person you love if they happen to be the same sex as you? Sign me up then cause, yeah, only bad people suffer in that system
On a serious note. Are there any countries without any national debt? Because if not then clearly capitalism is broken right?
No, if anything it shows capitalism is working. When you can increase or tighten money supply (ie when you can print and shred money) debt isn’t what you think it is. A state with money issuance powers is not a household.
I can thoroughly recommend “The Deficit Myth” book by Stephanie Kelton, if you wish to understand modern monetary policy better.
Or watch the film Finding the Money: https://youtu.be/3HRgsYSLOYw?si=g_CgqMWtC7oBCkGn
And to answer your specific question, there are countries with very low debt, but that’s usually due to either not being able to “borrow” money (again, borrowing doesn’t always mean what we would think as borrowing when you can issue your own money), being locked to another currency (Denmark is a great example - amazing economy and locked to the euro) or having a large generation of wealth (typically oil). Larger countries can issue debt more easily.
Micro-economics vs. macro-economics
I strongly encourage people who still think like OP to look up what happened the last time we paid off the national debt.
…link?
Andrew Jackson sold off enough Native American land to cause a real estate bubble, and between that and other things started a bank run, and the kind of people that think they’ll win the shell game pretend it’s because non-productive debt is good, and the problem was elimination of debt, not how it was done and other circumstances (among them being on a gold standard so you can actually do a bank run)
https://www.history.com/this-day-in-history/andrew-jackson-national-debt-reaches-zero-dollars
Are you immortal? Do you have an income vastly higher than the servicing cost of that debt? Do you owe the large a majority of that debt to yourself? Are you able to, if push came to shove, tell your external creditors to go fuck themselves and dare them to so much as try to collect on the debt you don’t feel like paying? If you can’t answer “yes” to all these questions, you aren’t the US and have a debt situation that has absolutely nothing in common with the US debt.
Do not forget that you are also the very entity that hands out the currency you hold your debt in.
It’s like Dwight printing IOUs for Schrutebucks
Wait till you learn about how the stock market works. Everyone with a share actually just holds an IOU in the DTCC.
It’s all built on bullshit
I remember users on another platform went into full rage mode when I said the stock market was just legalized gambling, telling me how SAFE!!! IT IS IF YOU DO YOUR RESEARCH!!!>
Okay. Black Friday and Too Big to Fail only happened in my dreams.
putting people in debt is how people with already too much money make even more money from people who never had enough
Two things:
- if you owe the bank $34,000, it’s your problem; if you owe the bank $34,000,000,000,000, it’s the bank’s problem.
- its a big club, and you’re not in it.
That’s a lot of zeros, when written like that
Yes, and it is the correct number of zeros to use. I find it helps to put things into scope. “Trillion” is an abstract magnitude to most people. Writing it out numerically makes it clear how absolutely enormous the number is.
Worth pointing out that credit scores are completely detached from the government. They are entirely private industry, that is collecting and selling your financial info without your consent or opt in. If you were born before 2004, then they have also accidentally leaked literally all your personal info to the dark web, with literally 0 consequences.
If you had 34 trillion in debt and a centuries-long history of making on-time payments, you’d have a perfect credit score.
Don’t forget being the only issuer of the currency you get indebted in. If I could get indebted in a currency I create myself, believe me I would
Articles and posts like this really just exist for conservatives to shout that we need to stop federal spending and cut out “unimportant” things like Dept of Education, as described in Project 2025.
The problem is that debt is good. It enables us to pay for infrastructure projects and services. It doesn’t work like a household budget…not on the scale of international economies…because money “in the bank” is money that’s not in circulation.
When money is not in circulation, it’s not being used to pay for goods and services…it’s just…sitting there being hoarded.
You all complain about Musk hoarding a few hundred billions. Imagine if the debt were in the opposite direction and the government had $34T sitting in the bank doing nothing.
And anyone can buy Treasury debt. In fact, last year it was an AMAZING return on investment for anyone that bought into it and holds into the debt for a few years. One of the safest places anybody could put money to earn a return (behind a HYSA at FDIC insured banks).
Fully agreed, the whole “Debt bad! Deficit evil!” trope is just neoliberal propaganda against public expenditure, which translates into a weakening of the welfare state
When money is not in circulation, it’s not being used to pay for goods and services…it’s just…sitting there being hoarded.
This is why I think the velocity of money should be a key economic indicator. Money moving around and doing work is what makes an economy better for everyone. When it starts to pool in the economy it slows down and benefits only a few.
This is another thing I learned from “Making Money”
The US govt basically has a perfect credit score. They have almost infinite payment history and almost infinite available credit.
“Bankers hate him! Get an 850 credit score and dictate the terms and interest rate of your own debt using this one simple trick.”
