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Accelerated Evolution

Federal debt cap being raised to $8.965 trillion


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While 9 trillion dollars appears to be an enormous amount, you need to put it into perspective before waving your hands in the air and screaming.

When you look at national debt try looking at it as a proportion of GDP. The gross domesic product (GDP) of a country is a handy reference to the comparitive size of its economy.

Currently, the USA's debt is about 65% of its GDP. Is that high, low, unsustainable?

Well, Japans debt is 170% of its GDP. They aren't the booming economy that they used to be, but they aren't in imminent danger of a collapse either.

Relatively healthy economies (Canada, Germany, France, Austria, Netherlands, Switzerland, UK) have percentages ranging from around 70% to about 40%)

When will the national debt get paid off? Never / always.

Never: We will always have a national debt.

Always: Borrowed money is always paid back, on time, to whoever loaned it. (And then we borrow some more)

Why not pay it off?

The argument against that would likely be that the government is investing in your country's infrastructure in order to help its GDP/economy to grow. Think of it this way, even healthy companies borrow money from banks. Why? So they can expand faster than if they didn't have the loan. As long as your expansion balances the cost of the loan, it's good.

What if all the loans are called in?

They are, constantly, according to their terms. They are always paid off.

What if we can't meet the payments?

The USA can currently easily make all of the outstanding payments, and keep getting new loans. Unless we have an economic collapse.

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