Quinn Angelia Pullens

Of course $40T is threatening number. But it is just a number. In absolute terms it is what? 3-4 times larger than 20years ago? So what? 20 years ago word “milioner” meant a lot. Nowadays if you don’t have 1M in the US at the retirement time you are below poverty line.
In a way US debt tracks world inflation - it is not strictly scientifically correct - but it is helpful to think for a moment in this frame.
Any closed economy to be operational, has to have money supply sufficient to perform trade operations, short and long term borrowing and lending, etc etc. So money amount required for safe operation is driven by economy size and roughly volume of trade (also increased by natural “frictions” and amount of abuse).
Now think about the world as a closed economy and USD still being world reserve currency, whatever they say it is. In a sense it is the only reserve currency, it depending on definition of words but even if it is not “only” it is still very dominant.
USA as a world currency issuer has benefits and disadvantages. It will be long article if I wanted to describe all of them. But roughly it has a lot of geopolitical influence because of this but it is also destined to run trade deficit. Also inside the UsA it is beneficial for the white house and financial sector and is harmful for industry and people overall.
In a sense this 40T debt is the debt of entire world but USA has to keep it in their balanse sheet.
Obsession over this debt inside the USA is harmful, because it is used in manipulative ways to destabilize internal situation.
Obsession outside the USA threatens international trade and economical stability worldwide. Just for comparison, economic crises caused by 1972 events known as the end of so-called “gold standard” effectively were attempts to question status of the USD as the world reserve currency and caused crisis far worse than 2007 one. World had no chance but accept UsD as “international” currency back again few years later and abandon attempts to peg it to gold.
It is not entirely true that world didn’t have any alternative options, and it is entirely true that US abuses the power it has due to its currency special status, and not only the US but entire “western” world in a sense does. So industrial non-“western” part of the world also in a sense do not have any other options but abuse their “industrial” status.
It is entirely possible to find a ways to fix this situation but it requires
- awareness and honesty about current state of affairs
- full international cooperation
- number of very smart economists and financiers
- a lot of good will and ability / willingness to accept a lot of compromises
of course it is not going to happen. So in next decades we are destined to see more global crisis events, more abuse of power, more inflation and more manipulative rhetorics around all of this.
and to anticipate objections, “gold standard” or bitcoin-standard is not going to happen, just because those are not viable solutions.
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