A while ago, I decided to try to understand why almost every country in the world is in some form of significant amount of debt. After watching a lot of YouTube videos and Google searching I’ve come to understand that the world‘s economy is built around debt.
In particular, the United States issues bonds, people,entities, etc buy those bonds, and when that bond is due the United States because of the amount of debt that it is in, usually issues a new bond to cover the expense of the last bond that it was not able to pay back by the time it was called in to be paid back.
This on top of the fact that every year we spend more revenue than our federal government generates, the deficit goes up AND the amount of money we are paying on these loans interest wise goes up which we paid 19 percent of our federal government’s revenue last year in interest alone.
SO- as someone with a non-economic background it seems that one day the ammount we pay in interest is going to keep going up to the point where the amount in interest we pay COULD take up the whole revenue of the US for an entire year
Am I right or thinking incorrectly about this? If right is this technically what we would refer to as a bubble that would eventually pop and if so I imagine it could be a global catastrophe?
When will the scales of the United States debt tip over and spill out causing it to crash?
byu/-Chrysoberl- inAskEconomics
Posted by -Chrysoberl-