The bulk of the U.S. national debt in 2017 (over $14.5 trillion worth), is owned by a consortium of public sector groups, foreign governments, banks, insurance companies, and others. Some of this debt is concentrated, not only in U.S. Treasuries, but in savings bonds and Treasury Insurance Protected Securities (TIPS).
When this debt rises in an unsustainable manner, such as is the case today, it increases the long-term obligations of the U.S. government and increases interest payments necessary to service the debt load. Since the government receives the bulk of revenues in the form of taxes, higher interest payments and future obligations put upward pressure on taxes down the line.
Historically, the US debt has reach the same level per GDP as just before WW11. After the war debt tumbled to around 50% of the GDP
Just like we can perform technical analysis and any chart we can do so on the debt graph. Looks like to me its at a resistance level and with increasing political tension around the world looks like to me we are in for another war.
But, in reality the debt to wealth Holdings in the US is just a drop in the ocean.
This is one of the big myths if one does not truly understand how modern banking works.
The big myth is that the federal government must raise funds through taxation or borrowing in order to spend. In other words, government spending is limited by its ability to tax or borrow.
But the reality is that the federal government spending is not operationally constrained by revenues, meaning that there is no “solvency risk.” In other words, the federal government can always make any and all payments in its own currency, no matter how large the deficit is, or how few taxes it collects.
