51
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 24 Mar 2026
51 points (100.0% liked)
United States | News & Politics
9126 readers
270 users here now
founded 5 years ago
MODERATORS
I did read the article, but I also understand other factors that the article doesn't talk about. So, I can use that broader understanding to contextualize what high levels of debt mean in practice.
The debt, and payments on interest, might cause more inflationary pressure than eliminating it would cause.
I think they could just print 39 trillion dollar coins and instantly pay off the debt.
The key context is how the system actually works though. The government doesn’t just print cash and hand it out. Typically, they issue Treasury bonds instead with the understanding that the government will pay back later with interest. These bonds are then bought up by pension funds, foreign governments, big financial institutions, etc.
When the government prints too much money or issues too many bonds, the bond holders start getting awful nervous about their investment. They wonder if the dollars they get back in ten years will be worth the paper they’re printed on. So they demand a higher yield to cover the risk. It’s not unlike a credit card company jacking up your rate when you miss a payment.
Rising bond yields, in turn, make the government’s interest payments go up. Bigger and bigger checks need to be paid to the people who lent the money, which reduces the operational budget. Today, that sum is sitting at something like a trillion dollars a year. It’s money that’s just flowing out of the treasury and straight into the accounts of bondholders.
This seems like an entirely self-created problem by designing a system where the government doesn't just print cash.
Of course, but it works in the interest of the oligarchs, so here we are.