Forums → WEPR → Impact of Debt

Here in the US, an argument that gets brought up in seemingly every debate is the fact that our country is 18 trillion dollars in debt. And a question I really want answered is: why should we care? Our debt has minimal impact on our country's spending ability; in the end, the US is accountable and will always be able to keep borrowing more money, or even print more ourselves. So are there any tangible negative impacts that our massive debt has brought about or will soon bring about? Or is it just a meaningless number to be ignored? I'm kind of leaning towards the latter.

I have to agree that the US seemingly has a powerful economy. But, coming from a country that is deep into a debt myself, I can tell you, that everything seems fine before the whole thing explodes.

Regardless, the main way those 18 trillion dollars can cause your country trouble is if the banks owed decide to ask the money back simultaneously...that's how it starts I suppose. But if you think that it is just a meaningless number, you are in my opinion, wrong. Think of the economic crisis that started in the US in 2008-09 (and later moved to Europe). Worse, think about the Wall Street Crash of 1929 and the Great Depression that followed it. You've had many more economic crises since the 18th Century.

So I don't think 18 trillion dollars can be just a meaningless number

I have to agree that the US seemingly has a powerful economy. But, coming from a country that is deep into a debt myself, I can tell you, that everything seems fine before the whole thing explodes.

Ah, but there are a couple key differences between the US and other countries that have recently collapsed due to debt...let's just use Greece as an example.

First, the US has much better international credit than pretty much any other country, meaning others will always be willing to lend money or buy bonds. That means the US will never truly "run out" of money. Second, unlike countries in the Eurozone, the US has its own currency, making it easier to manage true financial crises.

Think of the economic crisis that started in the US in 2008-09 (and later moved to Europe). Worse, think about the Wall Street Crash of 1929 and the Great Depression that followed it. You've had many more economic crises since the 18th Century.

I'd argue that none of the examples you provide are caused by debt. We're now recovering from the Great Recession, and yet our debt has nearly doubled since the recession began. If it were truly caused by debt, it would be even worse right now. As for the Great Depression, you yourself state that it was caused by the stock market crash. Agricultural overproduction also played a significant role, but certainly not the national debt.

First, the US has much better international credit than pretty much any other country, meaning others will always be willing to lend money or buy bonds. That means the US will never truly "run out" of money. Second, unlike countries in the Eurozone, the US has its own currency, making it easier to manage true financial crises.

Of course and I am aware of these differences. I only noticed that everything seems fine until it is not. It is highly possible that truly nothing happens.

I'd argue that none of the examples you provide are caused by debt. We're now recovering from the Great Recession, and yet our debt has nearly doubled since the recession began. If it were truly caused by debt, it would be even worse right now. As for the Great Depression, you yourself state that it was caused by the stock market crash. Agricultural overproduction also played a significant role, but certainly not the national debt.

Yes, they are not caused by debt, but all I am saying is "how can 18 trillion dollars be a meaningless number?". Even for one of the most powerful economies in the world, it is pretty high.

The examples I've used are not connected to the debt itself though, you have a point there.

all I am saying is "how can 18 trillion dollars be a meaningless number?"

And there's the 18 trillion dollar question. It doesn't seem possible that such a large number can mean absolutely nothing. And yet no one can bring up a specific harm of that number, other than vague generalities like "the whole thing will explode".

"how can 18 trillion dollars be a meaningless number?"

Why should you care? Because it is very likely a ticking time bomb. I am far from being an expert in this matter, but if you want information, head over to the Risks and debates section of the American debt wiki article.