Take a look at Zeihan's video where he shows in a graph how US debt level compares to other major economies. https://youtu.be/mcZPOuI-vcU?t=939. US is in the middle of the pack. US is going to be ok.
Also, watch until 20:38. You will see how screwed up some countries are when it comes to debt.
Most developed countries' economies have in the range of debt that Zeihan described, so not sure what you're getting at, unless you think the developed countries as a whole is crashing. Not seeing that really anywhere with low unemployment and rising stock market.
This is a distraction. If you're in terrible financial shape, the fact that others are in worse financial shape might make you feel better, but it doesn't change the fact that you are in terrible financial shape.
The US owes ~$250K per worker. The the average worker pays something like ~$8K per year in federal taxes. We added another 12.8K per worker in 2023.
Our system in incapable of the kind of action which is required to save of from this death spiral. The political incentive to lie--to tell the people that everything will be okay, and to tear down anyone arguing for drastic and painful solutions--is simply too high. Our elites will lie to us until the final collapse is underway, and the majority will happily follow them into oblivion.
> The US owes ~$250K per worker. The the average worker pays something like ~$8K per year in federal taxes. We added another 12.8K per worker in 2023.
But how much does the average tax paying entity hold in t-bonds? Directly, or indirectly (i.e., holding stock in companies that hold t-bonds). For example, Apple holds like $60B in t-bonds.
People tend to misunderstand government debt. The Treasury is essentially a gigantic bank. There are some entities that are so large and flush with cash that they have no alternative but to park their cash in the Treasury. If we were talking about a private bank, we'd call these deposits "liabilities." But "Treasury liabilities" doesn't have the same negative ring to it that "government debt" does.
Apple gives the Treasury $60 billion bucks, and suddenly "the government" is in $60B of debt. But in X years, it's going to give that $60B back to Apple, plus a little bit in interest. It's quit likely that the 1% interest that the government will pay Apple is orders of magnitude less than the taxes Apple will pay to the government over those 10,20,30 years that bond will take to yield. So the government still comes out ahead.
> The political incentive to lie--to tell the people that everything will be okay,
The lie being pushed by politicians is that the debt is something to worry about. Politicians have warned about debt since the country's birth. Yet, no current politician is concerned enough about the debt to actually address it.
They could pass a tax that directly covers interest payments on the national debt. But they don't do that. Instead, they lie and say that cutting spending is the only way to cut the debt. Which completely ignores the fact that Apple can buy t-bonds (thus creating national debt) and that money can not be spent - the government still goes into debt in this instance.
Honest question: when the government gives back that $60B, and the thousands of other billions, where do they get THAT money from, since the original $60B is surely long gone. I assume you’ll say from other money it collects from new sales of bonds. It sounds like a shell game.
It's not a distraction; most of the developed countries have similar level of range of debt. Maybe that's how modern developed economies are suppose to function.
Anytime people talk about failing western economies, I find it easy to make a "you should see the other guy!" argument. We dont have > 500 million people at risk of starving to death in the next 10-15 years, and were not at risk for total energy collapse. Were not trying to gaslight the world that we are not looting all of the fish in their seas due to impending food source collapse. Were in horrible shape but compared to most of the major economies of the world, were relatively o.k.
This does not mean things are o.k. in the USA, or that we dont need to fix things. Its just that were not the ones that truly need to panic, "collapse" in the West is different than in the old world, just like "poverty" in the USA is radically different than what it means on most of the world.