Like how does it affect the average citizen on a day-to-day basis?
Why do we have a national debt in the first place (as presumably the richest country in the world)? Who lends us the money, and do we have to pay them back?
Also, as I understand it, we can’t really get rid of the national debt, but we can slow down the amount of spending. Why does the rate of our debt accumulation matter?
If we’re already trillions in debt, what difference would it make at this point to spend indefinitely to improve our country?
In: Economics
the important distinction with the US debt is that we’ve never missed a payment on our debt
imagine if you were a bank and had a client who owed the bank a incomprehensible amount but for the past few decades, they never once missed a payment
are they really that “high risk?”
in the eyes of the bank, they haven’t borrowed more than they can handle
if you “lend” money to the US, they will pay you back at the amount they promised they would. the US makes so much money and has so much revenue and has so much security of future earnings that lenders don’t particularly care lol
that’s one of the reasons why during some of the past government shutdowns, their credit rating was decreased. although they didn’t miss any payments, the *prospect* of them doing so came up during discussions and that’s not good for financial confidence
if the US “borrowed” trillions, they may not have the funds to pay back what they borrowed on the agreed schedule. so although it *feels* like we owe a lot, we can handle it
edit: in the decades to come, fiscal conservatives will continue to bring up the point
“are we borrowing more than we can pay back?”
which is always a smart question to ask, but for now, it’s not an issue
notice the italics and quotation marks. it’s really hard to ELI5 this when there are thousands of variables affecting it lol. things as “unrelated” as interest rates in foreign bonds or the rate of navy shipbuilding will make the US less “creditworthy”
edit2: imagine if you had an acquaintance who always asked to borrow money to buy video games and beer and go out to eat. but sometimes they borrowed money to fix their mom’s house or buy clothes for their kid. but every time you lent them money, they paid you back at the exact time they told you they would
despite whatever they borrow the money for, they still pay you back plus interest. you can trust that and make some money off this. until the day they miss a payment, they’re effectively “free money” to lend to them
the US has been doing that for decades
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