The only thing I can think of is that they pay old bonds with income from new bonds? Isn’t that a ponzi scheme?
Google talks about securities, bills, notes, and bonds. But I don’t really understand what those are.
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They pay old bonds with a combination of tax revenue and new bonds.
It’s not exactly a Ponzi scheme since it’s fully transparent, you can see exactly what they’re doing and they’re not pretending to pay you returns that don’t actually exist (the hallmark of a Ponzi scheme).
The fact that they keep issuing more bonds than they can repay from taxes is why the debt keeps going up.
There are two main sources of revenue that aren’t bonds. Taxes, which you are probably familiar with. Those include sales tax, import tax, income and inheritance tax. The other source of “revenue” that the US government has(and all governments with their own currency) is that they just print money. Yes, that’s right, most governments can just clap their hands and create more money to pay off their debts
Now you don’t want to print too much money to pay these debts off, printing money generates inflation which can increase interest rates, causing the government to further need to print money, a process that can spiral out of control. A considerable amount of government money printing to meet debts is completely normal though.
The US Government prints money backed by the full faith and credit of the US Federal Government. What they do, besides other comments on this question, is manage the amount of interest they have to pay on the debt, not what they have to pay back on the principle
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