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Hotshot Wharton professor sees $34 trillion debt triggering 2025 meltdown as mortgage rates spike above 7%: 'It could derail the next administration' (fortune.com)

submitted 7 months ago by yogthos@lemmy.ml to c/usa@lemmy.ml

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[–] karashta@kbin.melroy.org 3 points 7 months ago (1 children)

The federal government creates the money either through direct spending by Congress or back stopping money creation by private banks via the reserve system. Money is then destroyed through taxation.

The "debt" is literally the count of untaxed dollars in circulation.

Treasury securities are simply money that they pay interest on.

They create the money. How can they ever run out of money???

[–] yogthos@lemmy.ml 2 points 7 months ago

They don't run out of money, but they do increase yearly debt payments reducing the overall operating budget for the government.