| > 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. |
That "little bit" in interest adds up to $1 Trillion per year.
> The lie being pushed by politicians is that the debt is something to worry about.
The annual cost of servicing our debt is currently >20% of federal revenues. What happens when it's >50%? What happens when it's >100%?