U.S. Debt Tops 100% of GDP

jdw64

Jesus died carrying humanity’s original sin. Recently, President Trump seemed to cosplay as Jesus. In that case, could he also die carrying America’s economic original sin and thereby cancel the U.S. national debt?

tootie

This isn't great but it also isn't a magic threshold. GDP is annual economic activity and debt is cumulative.

sobriquet9

What's the point of comparing quantities expressed in different units? Debt is in dollars, GDP is in dollars per year.

gortok

Here’s the issue. We don’t have any serious leaders on this issue. We don’t have scholarship divorced from politics about this issue. Maybe we never will. The Austrian school basically thinks this is the end of the world. The MMT folks think this is business as usual. The Keynesians are somewhere in the middle, but being in the middle of the road politically is not the same as an apolitical view on this. As a lay person who hasn’t studied economics enough to understand if this is an actual issue or a theoretical issue, I really need some politics-free scholarship on this. It doesn’t help that our political leaders say it’s an issue, unless it’s their party that wants that spending, then it’s fine. The right says it’s fine as long as it goes to endless wars, and the left says it’s fine when we spend the money on social programs. Both say it’s bad when the other side spends it, but not when their own spends it. This is exhausting and demonstrably not helping us resolve the fundamental issue of how do you manage a large society without it imploding.

1970-01-01

Everything will be great until the default happens. After that, everything will still be great, we will just have less reputable friends. That's how spirals work.

nickserv

It's not a problem so long as borrowing costs are low. Now if USD loses reserve status, that could be very problematic, since the US basically spreads its borrowing costs to the entire world.

eunos

and wasnt GDP boosted by the inflation from Biden era?

Ritewut

And now Trump and the GOP want to further increase debt by adding billions to ICE budget which is what this current shutdown is about.

the_real_cher

Can't we just print more money to pay off the debt? And there will be no consequences since we're the reserved currency for the world backed by the most powerful military in human history.

iso1631

Who is the debt owed to What will they do if it was repaid Why do people keep lending money to the US government if they think it's a problem

ur-whale

> U.S. Debt Tops 100% of GDP Does not matter as long as they control the printing press for the reserve currency of the world.

resters

Get ready for hyper-inflation. It's a good time to be a debtor!

user20251219

Triffin Dilemma https://en.wikipedia.org/wiki/Triffin_dilemma

diogenes_atx

All the great Western hegemonic powers have used public debt to finance the requirements and ambitions of the state. This was true of Spain in the sixteenth century, Holland in the seventeenth century, England at the height of its power during the eighteenth and nineteenth centuries, and the USA since World War II [1]. Public debt finance is a force multiplier that enables the government to undertake far greater civilian and military projects than it could otherwise achieve. Everyone knows this, including the people who are running the U.S. Treasury and the Federal Reserve. As a percentage of GDP, government debt is high by historical standards, and it is rising at a fairly rapid pace. That could be a problem if it continues unabated. But there are two solutions: reduce spending and/or raise taxes. Most U.S. federal expenditure goes toward either defense, entitlements or interest on the debt, so it seems unlikely that spending will fall very much. That means higher taxes. At some point, the country will need to find a political reformer who can sell tax increases to the electorate. Until then, the crisis just continues to quietly grow. [1] Giovanni Arrighi (1994) The Long Twentieth Century: Money, Power and the Origins of Our Times https://www.amazon.com/Long-Twentieth-Century-Money-Origins/...

ksec

I thought the US crossed that mark long ago. According to FED [1] it was in 2013. Could someone explain what the WSJ means given the article is behind a paywall. [1] https://fred.stlouisfed.org/series/GFDEGDQ188S

hashlock_p2p

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