How can the US national debt be over $23 trillion if that much money doesn’t even exist in the world?
In: Economics
Debt is just a promise of future payment. The government claims it’s assets (US citizens) will provide enough income to cover the debt and as long as those who lend find that sufficient, there is no limit to how much the government can borrow.
Imagine you want to buy a tractor from someone but you can’t afford it. The seller might be willing to give it to you if you promise regular payments. In this scenario no money is originally transacted and debt increased, demonstrating that current money supply is not a constraint on debt.
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