No Stupid Questions

80% of government “debt” is actually in the form of bonds. People voluntarily give the government more money than they’re required in taxes because they believe the government will be strong enough to pay them back interest later. The government does not have to pay down all that debt because the bonds are being cashed out at a predictable rate and people are buying new bonds all the time, so the new bonds finance the old ones.

For example, someone in 1995 buys a series EE bond at $100. It’ll be worth roughly $200-215 now, which is 30 year maturation. But due to inflation, $100 in 1995 is worth $212 today. So even though the US government paid out over $100 in interest, due to inflation it was basically a wash, and they had 30 years to invest that money in infrastructure. Meanwhile, since $100 is not worth as much now, people in the same social class are likely now buying $200 bonds, so really the US is on the hook for the last $15 or so. In short, this “debt” was actually a good deal for the US government.

The short version is the government is fine as long as it can pay the interest on its loans without needing to print so much money to do so that it causes hyperinflation. You don’t have the ability to do that with your personal debt.

Part of the problem is some debt is necessary for large or expensive projects. Think of it as similar to your home mortgage: most of us could not buy a home without it. Similarly governments have large or multi year projects that can be difficult to pay as you go and make sense to take out debt.

But everyone likes being Santa Clause , everyone likes bringing home the pork, and it’s a simple matter of writing a little more debt. No big deal.

A traditional Republican position is that thinking is insane, it’s not fiscally responsible. We can’t afford that. It makes a lot of sense until you see what republicans actually tend to do. In today’s world I imagine some republicans still have some twisted concept of fiscal responsibility for kicking millions off healthcare, but it boggles the mind to use that plus take on additional debt to give tax cuts to the wealthy. That is very much NOT fiscally responsible. If there is anyone out there who still believes in traditional Republican positions, they should be ashamed of what it’s become

A traditional Democrat position is we have human services and infrastructure that are important enough to write more debt. That sounds expensive, but again, think of it like that home mortgage: some things are important enough.

Realistically, the cost of debt rises and falls with a country’s economy, so you can have unexpected results where additional debt causes business to increase, making debt cheaper

the government is made up of some of the greediest fucks alive who're upset when that money is in the hands of someone that isn't them

Personal, business and government spending are all entirely different things.

Using one to think about the other makes very little sense.

Their spending is someone else's income that is then taxed that is then spent that is then taxed.

Responsibly used some government debt is good. It helps growing the wealth of it's people both now and in the future.

Irresponsibly used it's a headache for the next generation.

I've noticed that a number of politicians show signs of sociopathy.

I think that's a key difference.

You don't pay someone else to calculate it all for you?

Government debt and household debt are not the same thing. The politicians know better but they know people don't. So they really lay it on thick to equate the two things.

Your debt isn't creating jobs or industries. Government debt does. You're not able to sell your debt. Government can.

I think technically, there isn't a ceiling for how much debt a country can take on as long as it's growing. It's not great, but also I don't think it's as bad as people think

Government spending is private savings.

Worrying that the government will run out of money is like worrying a basketball referee will run out of points to give for baskets.

This comes at it from a slightly different angle but explains the difference between us and the government in how money and debt have to be managed: https://youtu.be/sAKr55O7qaU

You're trying to use logic to understand it but you also have to understand that the only actual logic about it is the logic we've intentionally applied to it, by choice. Money only has the meaning we give it.

It makes more sense when you realize it's all fiction. It's just a game we play our whole lives because so many of us are very competitive and the ones who aren't still have to compete against the ones who are, and at the highest levels of national policy they're not even playing the same game anyway. They're using it to metagame against other countries.

You have a checkbook‽

Because if you run out of money, there's a consequence....

Because if you can make the currency you pay back the loan with worth less than what you borrowed, you gain. That's why they want some inflation.

Problems happen when you keep borrowing more and more each year, and also do stupid shit that shakes the faith of those lending you money in your ability to pay it back

Because the government doesn't have a bank account, they have tens of thousands of them all with different rules, and they don't spend the same money they taxed

Money is just numbers at this point, and so Congress comes up with numbers to fund everything they want to do, they come up with formulas to tax various things, and the two sets of numbers have no real relationship to each other