[d_burfoot]

> Firms in the broad Russell 3000 share index have a total market value of $79trn

I sometimes try to get people to worry about the catastrophic state of American public finances by pointing out that the net national debt, including unfunded liabilities, is estimated to be $175T [0]. The government could appropriate all the equity from the top 3000 largest companies, and also the entire real estate market, and it still would not be able to pay its debt (RE market is $55T).

[0] https://balajis.com/p/americas-175-trillion-problem

[827a]

The $175T number is unfair because it treats Social Security and Medicare/aid as a liability instead of the service that they are. You might as well say the US is in infinite debt, because we'll always be paying something for our military every year, so infinity years * any dollars = infinite debt.

Also: All of those numbers you use to scare people are way, way off.

[JumpCrisscross]

> it treats Social Security and Medicare/aid as a liability instead of the service that they are

It's a liability because the U.S. has promised to pay it. We haven't committed to a level of military spending backed by our full faith and credit.

EDIT: Never mind! Apparently we can just cut social security payments.

[sarchertech]

The NATO treaty says that we have to maintain our ability to resist armed attack, so there is some minimum. And we’ve made public commitments to spend at least 2% of GDP (though that isn’t part of the treaty).

[JumpCrisscross]

Neither of those are full faith and credit guarantees. Congress can nullify them in a way it Constitutionally cannot actual debts.

[sarchertech]

SS and Medicare aren’t debts either in that sense. Congress can reduce benefits if they please.

In Flemming v. Nestor SCOTUS ruled that SS benefits are not guaranteed contractual rights but are instead statutory entitlements that Congress may modify or revoke.

[lionkor]

Surely NATO has enough competent people to know that the biggest and only threat remains the USA and pretty much any othed conflict is a direct result of provocation or invasion by the US, right? Or do we all watch Jarhead 2-5 on repeat until all we can say is OORAH

[sarchertech]

Germany is in the middle of a massive military build up because the primary threat they’re concerned with is Russia and they’re worried that the US won’t back them up anymore.

[jonahbenton]

This misunderstands the power of monetization, or mistakes "dollars" having some kind of fixed "value." They do not. Whether one agrees with that or not, thinking of this as a "debt" problem where a hypothetical move is to appropriate equity- setting aside the fact that equity ALSO is not in a fixed unit of measure- anyway, thinking of appropriating equity to solve a public debt problem is a category error. That is how accounting works for business structures that exist within a monetary system but NOT for government and currency printers that define the monetary system. The MMT people are right about this. Public debt is a measure of private sector wealth. That is how the machine works.

[alex_young]

  The U.S. Treasury publishes a daily total of the national debt, which as of May 2026 was $39 trillion.

  a little less than half of the total national debt is owed to the "Federal Reserve and intragovernmental holdings"

  In December 2020, foreigners held 33% ($7 trillion out of $21.6 trillion) of publicly held U.S. debt

[~] https://en.wikipedia.org/wiki/National_debt_of_the_United_St...

[d_burfoot]

39T is just the outstanding value of all the Treasury instruments (T-bills, etc). The entitlement programs (SSA and Medicare) have made commitments to certain levels of service and payments that are far in excess of the revenues they bring in, that's what is meant by "unfunded liabilities".

[margalabargala]

That's not debt, though. Congress can just declare SS/Medicare null and void, or change the amounts, etc. They can't do that with actual Treasury debt.

If you signed up for some expensive monthly subscription, you don't need to do the math about how much it would cost if you keep paying it every month until you die 60 years from now and then freak out about how big that number is. You can just...cancel the subscription.

[ElProlactin]

The thing is that at these levels of debt, repayment is never the goal.

[LPisGood]

How can you use a word like “never” when this debt is literally unprecedented in the history of the world

[avaer]

It can never be repaid. Presumably the people in charge of generating it are not oblivious to this fact.

"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem."

[sarchertech]

It goes beyond that. $175 trillion includes all future entitlement spending not debt, it’s crazy to call all future entitlement spending for every living person debt. By that metric there’s essentially no such thing as a solvent government anywhere in the world and there never has been in modern history.

[827a]

Repayment isn't a goal that anyone in the system should reasonably want. Federal debt is not like credit card debt. Debt is a product that the US Government sells. Me, being a big corporation or human, go to the USG and say "I need somewhere to park my money that is safeish from inflation". The USG sells me debt at X.Y% interest. The money now generates safe interest, which means its safeish from inflation. A world where the USG "repays the debt" is a world where this essential product is no longer available.

High levels of debt only signals high demand for this product.

This is super-counterintuitive, but the debt has little to do with the deficit. We could run a surplus and still be in the same level of debt (in fact, this would be a tremendous place to be). We could run a deficit and have no debt (just print money, duh). The decisions that go into column A generally do not impact the decisions our leaders have to make in column B, though there are of course convenient relationships between the two.

[ElProlactin]

> Repayment isn't a goal that anyone in the system should reasonably want.

Repayment to $0 isn't a reasonable goal but there are a lot of problems with your argument.

The biggest question is about sustainability. Is the debt-to-GDP ratio stable/manageable and is the interest rate on the debt below the economy's growth rate? If the answer is no, you have a problem.

> High levels of debt only signals high demand for this product.

This is backwards. The amount of debt is set mostly by government supply, which is driven by deficits. The demand signal is the price, which in this case is the yield. If the demand was high, yields would drop as the amount of debt grew. Instead, we have rising debt and rising yields, which means supply outstrips demand.

The US no longer has a AAA sovereign credit rating for a reason. When Moody's (the last agency to downgrade the US) stripped the US of its AAA rating, it cited "rising debt and interest costs 'that are significantly higher than similarly rated sovereigns.'"

The biggest issue at this point isn't the principal, it's the interest. Interest is the fastest-growing line item in the federal budget. It's almost at $1 trillion/year now and expected to nearly double by 2035. You either have to cut from other spending or borrow more to pay the interest.

Your comment implies that this doesn't have a real cost, which is silly.

[dnnddidiej]

So the more people want US$ debt the more tbe US government must spend?

[testrun]

Well, will be interesting to see how this play out. The US federal debt repayments is already above $1trillion a year.

[carlosjobim]

Government debt isn't like personal debt or business debt. The treasury can choose to not honur it, and there's nothing anybody can do about it. Of course they're not going to find a market to sell more debt to after that, but wouldn't you say they already have enough?

No sympathy for people and institutions who make deals with the devil and expect the government to forever enslave taxpayers to honour those deals and pay back with interest.

[donavanm]

As mentioned defaults do shockingly little to change future funding. Its been years since i looked but its something like a few years of “cool down” on issuance and a few points of coupon premium. The economist has done some great, very accessible, articles on this over the years.

Second, its critical that treasury bonds are denominated in USD. The us gov controls the monetary policy and can choose to inflate away the debt over time. This is in contrast to EM debt where they get trapped with foreign denominated bonds. See also the tensions around EU debt, greece, etc.

[JumpCrisscross]

> Of course they're not going to find a market to sell more debt to after that

Argentina is doing fine. The real constraint would be that defaulting on the debt would cause a credit crisis and bank collapses.

[Avicebron]

Pretty sure this is why the bankruptcy guy from NY was sent in

[flerchin]

The way I understand my money market settlement account at vanguard, is that it's all, or nearly all, treasuries. Treasury not honoring government debt would be the worst bank failure in the history of the world.

[carlosjobim]

It would be bad for you, but you also deserve that because you have made a deal with the government to enslave young people to pay taxes on their labour in order to pay interest to you. Loosing all your investments in a bond default would be a very fitting consequence for what you have done so wickedly.

[flerchin]

I am one of those young people laboring and paying taxes. It's not clear to me what I should do with the surplus of my labor that is available to me, that would be acceptable to a worldview like you seem to be espousing.

[fsuts]

Not true

The powerful people holding the debt will seek to change the government to one that obeys them

[sarchertech]

We also don’t have anywhere near $175 trillion in debt. That’s a crazy made up number.

[rhubarbtree]

Western debt is one of those problems you look at and say “this looks extremely alarming, why is no one panicking?” And then you assume that the elite know better and it must be manageable.

And then one day the consequences finally hit and you’re left reading the news “oh, so it turned out I was right and it was just common sense. Huh.”

US economy is screwed. UK economy is screwed. Neoliberalism killed it.

The reason everyone in politics is so elated by AI is the hope that a huge boost in productivity shrinks the debt as a portion of GDP. Talk about a wing and a prayer.

[JumpCrisscross]

...what does this have to do with these IPOs?