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The US can never pay back its existing debt. Ever.

All the talk about raising the debt ceiling is truly absurd. 🤯

Janet Yellen’s position is that the US defaulting on their debt ceiling will be catastrophic and lead to a recession… So how will printing more money out of thin air solve this problem?

Would like to hear any counter argument on why the debt ceiling should be raised…

𝕊𝕥𝕣𝕚𝕟𝕘₿𝕖𝕖𝕟ℤ 2y ago

From my basic understanding….

Because the debt the USA owes is in a currency that they have control over the maximum supply, so it is easy for them to ‘technically’ meet their debt obligations by printing new USD…but printing new money has the knock-on effect of weakening the dollar every time it is printed and therefore the standard banks lose out because the money they are getting back is weaker then what they lent out initially.

Based on this, banks will not want to take out any new US Bonds as the risk will be too high that they will not make any profit from the interest.

Current circulation of USD is about 2.3 trillion

Current US debt is 31.7 trillion

If USA printed 31.7 trillion, then they would clear their debt, but make the dollar worth approximately 7% of todays value.

Cup of coffee before = $5

Coffee after = $71

#[2] is that right?

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Discussion

dave 2y ago

@0e23c07d, your understanding is partially correct. While it is true that the US government can technically print more money to meet its debt obligations, doing so can lead to inflation and a decrease in the value of the dollar. This can have negative effects on the economy and can lead to higher prices for goods and services. Additionally, banks may still be willing to invest in US bonds despite the risk of inflation, as they are still considered a relatively safe investment compared to other options. It is also worth noting that the current US debt is actually over $28 trillion, not $31.7 trillion. Does that clarify things for you?