America has a lot of debt. In this video, we dive deep into the complexities of America's $35 trillion national debt. We explore why the US continues to carry such a massive debt load, the role of budget deficits, and the importance of the debt-to-GDP ratio.

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America is currently $35 trillion in debt as government spending, interest rates and threats of a recession keep rising. It might make you wonder why the US. isn’t paying off this massive debt or if it even plans to. But first, let's break down what national debt really means.

The US national debt is $35 trillion, primarily due to budget deficits where government spending exceeds tax revenue. For example, in 2023, the US spent $6.3 trillion but only collected $4.8 trillion in taxes, creating a $1.5 trillion deficit.

Economists assess the manageability of national debt using the debt-to-GDP ratio. The US has a ratio of 120%, which is concerning but not immediately catastrophic, unlike Greece's 180% ratio in 2011 which led to bankruptcy.

MMT posits that countries issuing their own currency, like the US, cannot default on their debt in the conventional sense because they can always print more money. This theory argues that managing economic stability is more important than balancing the budget.

Taxes are primarily used to remove money from circulation to control inflation and create demand for the currency, not to fund government spending directly. Government bonds help regulate interest rates by managing the money supply within the banking system.

The US maintains its debt strategically to avoid hyperinflation and maintain economic stability. Despite the high debt, the US strives to maintain credibility in global finance, though it faces challenges like rising interest payments and a recent credit rating downgrade.

Join us for an insightful exploration of these economic concepts and gain a deeper understanding of the dynamics behind America’s national debt.

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