The US is roughly $33 trillion in debt. But what does that number actually represent? In the most basic of terms, it is how much money the government has put into the economy minus how much it has gotten back from the economy. How much have we
printed and how much have we gotten back in taxes, is the simplest way to explain the US National Debt.
So, if the US dollar is king and the world
relies on it, why do so many people act like the sky is falling when we talk about this massive $33 trillion number? Japan is refenced by some as having a ridiculous national debt that is 200% more than their GDP and they haven’t experienced any major fallout like a depression.
Well, Japan has had a pretty slow growing economy and one that is much smaller and less significant on the world stage than the US economy. So, that is a one liner that debunks the whole Japan argument as to why national debt is not a big deal. but why exactly is the US debt a big deal?
The US national debt will not be a big deal as long as the US remains KING. Sure, there is going to be some fallout on the Medicare and Social Security fronts, but that will just mean we have to print more money to combat them. This will all have some inflationary effects on the broader economy but that is something we have come to expect, and as long as the US remains in power over currency and innovation in tech and medicine then no harm
no foul. UNLESS, the US falls from its position as top dog and people start demanding that the debts owed to them be paid all at the same time causing in economic disaster that will be close to impossible to recover from.
Basically, all is well while you’re on Top, but the fall will be catastrophic. Maybe we have another 200 years on top, maybe we only have 5.