LordBrownTrout
Diamond Member
Like mainly the GOP causing World depressions in 1929 and 2008...Currently, the debt to GDP ration is about 75 percent. As the debt to GDP ratio increases, debt holders could demand larger interest payments.
"Could"? Well, I could end up marrying Carla Gugino. The Browns could win a Super Bowl. Aliens could reveal that Donald Trump is just a reptilian in a bad skin suit.
The government isn't like an individual when it comes to debt. For one, individuals don't have the bargaining power of the world's currency reserve behind them, the US government does. And higher interest rates on the Public Debt are counteracted by shifting that to Intragovernmental Debt, which is what Clinton did. So this is a completely unfounded fear you appear to have devised right off the top of your head. Furthermore, the risk for lenders is of an individual dying and not repaying their debt increases each day (hence higher interest rates). Since the United States isn't a person that can die, the debts the US government owes aren't ones that have a time limit on them. There is no one, singular date by which all our debt has to be repaid. Thinking there is fundamentally misunderstands government debt.
They want compensation for an increasing risk they won't be repaid.
Why wouldn't they be repaid? What is the risk of them not getting repaid by people? Death and bankruptcy (and even then bankruptcy doesn't erase all debt). Can the US "die" or "go bankrupt" like Trump? No. So your fears are unfounded.
Diminished demand for US treasurys would further increase and likely crash the dollar. As the dollar falls, foreign holders get paid back in currency that is worth less. That further decreases demand. This has happened numerous times but everyone just thinks the gravy train will continue to roll.
Why would demand for US treasuries diminish? The only way that would be the case is if we defaulted on our debt. Now, who are the ones who threaten to never raise the debt ceiling? Oh right, the same ones who are now telling me that there could be diminished demand for T-Bills. But that's only the case if we don't raise our debt ceiling, causing defaults on our loans. Otherwise, raising the debt ceiling means we pay the loans that are due. So the only way that wouldn't happen is if you refused to raise the debt ceiling.
I mean, you get that, right?
I can see that you haven't looked back at history and observed the many nations that have collapsed due to massive inflation caused by frivolous behavior. You actually think that we'll just hum along forever by continually raising the debt ceiling, printing endless dollars, and failing to back up our currency by something tangible. That type thinking just astounds me.
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