10 June 2024<\/p>\n\n\n\n
By Heather Altamirano, Yahoo!Finance<\/a>:<\/p>\n\n\n\n The U.S. government\u2019s spending habits have reached a new record, and it\u2019s currently more than $34.5 trillion in debt. But owing money is nothing new \u2014 it\u2019s a part of the country\u2019s historical narrative. The U.S. has been in debt since its inception, borrowing $75 million from domestic investors and the French government during the American Revolutionary War.<\/p>\n\n\n\n But how did we get to $34.5 trillion, and why do Americans have to repay their loans when the government\u2019s soaring debt remains unpaid? GOBankingRates spoke to financial experts who explained.<\/p>\n\n\n\n Wealthy people know the best money secrets. Learn how to copy them.<\/p>\n\n\n\n \u201cThe U.S. government owes so much money because of the irresponsible fiscal policies that they currently have in place,\u201d Les Rubin, founder of Main Street Economics, told us.<\/p>\n\n\n\n \u201cIn recent years, the government has spent more than what it has brought in through revenue and the deficits have accelerated consistently from 2001 until today when those deficits are now exceeding $2 trillion per year.\u201d<\/p>\n\n\n\n He added, \u201cWe have a growing national debt that we owe to various countries, the Federal Reserve, various government agencies including Social Security and Medicare and private investors.\u201d<\/p>\n\n\n\n According to Eric Mangold, <\/p>\n\n\n\n founder of Argosy Wealth Management LLC<\/a>, the government has an advantage when it comes to paying back loans.<\/p>\n\n\n\n \u201cThe biggest difference between personal spending and government spending is that when the government spends \u2014 or overspends \u2014 and accumulates debt, it has the ability to print more money.\u201d<\/p>\n\n\n\n Mangold noted, \u201cThe everyday citizen can\u2019t simply go to the nearest mint and ask for more money to be printed for them, but the government can. But the by-product is that ultimately when the government racks up more and more debt to nightmare levels, and they can\u2019t print more money, at some point the tab needs to be paid.<\/p>\n\n\n\n \u201cThat tab usually comes in the form of higher taxes for all of us,\u201d he added.<\/p>\n\n\n\n Ever wonder what happens if the U.S. doesn\u2019t repay its loans? Our economy would suffer, and \u201ccatastrophic consequences would result,\u201d Rubin said.<\/p>\n\n\n\n \u201cThe value of the U.S. bonds would plummet dramatically, possibly to zero, ultimately with the result that many entities would become bankrupt by writing off substantial assets that would deplete their net worth,\u201d he continued.<\/p>\n\n\n\n Rubin explained, \u201cThe government would not be paying the interest or principal on the national debt. A default would likely mean we couldn\u2019t borrow more money, meaning the country would not be able to fund the operation of the government as well. This would likely lead to a collapse of the world economy and monetary system because the U.S. is so large and the staple of the world monetary system.\u201d<\/p>\n\n\n\n According to Rubin, the increasing national debt has serious financial implications for Americans.<\/p>\n\n\n\n He went on to explain, \u201cAs the debt increases and interest rates rise, a more serious issue arises for people who borrow money and use credit cards. For example, as Americans are looking to purchase homes, the interest rate on mortgages has increased dramatically as those interest rates are tied to the rate on the national debt. This makes purchasing a home unattainable for some Americans, adding additional stressors.\u201d<\/p>\n\n\n\n Rubin added, \u201cUltimately, interest rates influence what we pay, but also impact the future of the national debt. The country\u2019s interest expense has risen to over $1 trillion per year, making it harder and harder for the government to avoid deficits and pay back these loans. This is known as a Doom Loop \u2014 as debt increases and interest increases, it causes more debt and more interest, etc.\u201d<\/p>\n\n\n\n Americans work hard to pay off their mortgages, credit cards and car loans, so why isn\u2019t the government making the national debt a priority?<\/p>\n\n\n\n \u201cThe government CAN pay their loans due to their unlimited ability to borrow \u2014 for now \u2014 or print more money, as long as other countries and investors will continue to buy our bonds,\u201d Rubin said.<\/p>\n\n\n\n \u201cHowever, if someday the country cannot borrow money, we will have to default, leading to severe consequences. I think of the U.S. debt as a Ponzi scheme since there is no source to pay the principal on the debt and interest except to borrow more money. The Ponzi scheme will collapse when people won\u2019t buy our debt. When this happens, we will face economic catastrophe.\u201d<\/p>\n\n\n\n Read more at the original source here<\/a>:<\/p>","protected":false},"excerpt":{"rendered":" 10 June 2024 By Heather Altamirano, Yahoo!Finance: The U.S. government\u2019s spending habits have reached a new record, and it\u2019s currently more than $34.5 trillion in debt. But owing money is nothing new \u2014 it\u2019s a part of the country\u2019s historical narrative. The U.S. has been in debt since its inception, borrowing $75 million from domestic… Read More »The US Debt Is at $34 Trillion: Why Are We Struggling To Pay Our Loans If the Government Can\u2019t?<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":125,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","_themeisle_gutenberg_block_has_review":false,"footnotes":""},"categories":[21,14,22],"tags":[],"class_list":["post-4364","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-collapse","category-economy","category-global-reset"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/posts\/4364","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/comments?post=4364"}],"version-history":[{"count":1,"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/posts\/4364\/revisions"}],"predecessor-version":[{"id":4365,"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/posts\/4364\/revisions\/4365"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/media\/125"}],"wp:attachment":[{"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/media?parent=4364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/categories?post=4364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sellgoldmalaysia.com\/bm\/wp-json\/wp\/v2\/tags?post=4364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why the US Is in So Much Debt<\/h2>\n\n\n\n
Personal Spending vs. Government Spending<\/h2>\n\n\n\n
Repercussions If the US Defaults<\/h2>\n\n\n\n
Why the National Debt Is Alarming<\/h2>\n\n\n\n
Why Americans Have To Repay Loans If the Government Doesn\u2019t<\/h2>\n\n\n\n