The US national debt isn’t all that bad, in fact the good news about going that debt is this; Imagine there’s an inflation of 2% annually and you’re only paying 1% in interest, then every single year that you hold that debt, then it becomes cheaper and cheaper the longer you don’t pay it off.
Think of that for a second, if you’re paying 1% in interest but inflation is 2%, then that mean every single year, your outstanding loan balance is declining by 1%. You work less money in the future than you do right now, well guess what the same also applies in natural debt without interest rate almost to applies to 0%. The US is paying no inter on that 24 trillion dollar debt and when interest is 2% annually that 25 trillion becomes less and less intimidating every year that they hold on to it.
So in a way even if they just kept that amount of it, they held right now in about 100years from now, that would be worth a fraction of what it is today. In addition to that the US has a lot of value in terms of numbers here, it had 270 trillion in terns of assets and 11 trillion in terms of total outstanding debt, which has a net worth of 123 trillion dollars.
The United States still holds the 1% of the wealth as well that’s double of the amount of the next runner up, so when you take a step back you begin to realize that hoking on to 25 trillion of debt is hot as bad as it seems, when you look at the final picture, it would be like if I say up 25 trillion dollars debt. Without me clarifying that the debt is on cash producing rental properties and the det is mortgage debt and a really interest rates and the total asset value of all these properties is 10 million in that context, the 3 million is not so bad and it’s not so good also our national debt us also measured in terns of the GDP like I mentioned earlier is how much revenue our country produces and as if last year we had over 21 trillion dollars in GDP and at that time is about unparallel with how much debt we have.
For all of you real estate people out there, it would be like you received a thousand dollars of real estate in a month and your total overhead to hold that property Is a $1000 a month. So you’re not making any money per say but each and every month your mortgage balance will down due to inflation and you hope in the future that you could increase rent to begin making some money.
The issue however comes down to you and I and this debt growing out of control as you can see 1996. The amount if debt we’ve being taking on relative to how much money the country makes has now started exceeding a 100% I’m other words the country is now spending more money than it makes, so with that here are few of the concerns that gets brought up.
The first is that if interest rate begins to ride then the cost of holding on to all those debt becomes expensive, right now since interest rates are pretty much nothing the United States is peeing about 25 trillion is not that much orbs concern. If anything it actually would be better to hold on to to much debt with interest rates being so low than less debt with interest rates being really high. And that’s because with low interest rates that debt is very inexpensive to keep it if the interest rates were to start going to let’s say 4 percent. They holding that debt would end up costing a lot of money and start drawing a lot of other findings and when the US ends up needing more money it goes to probably do it through higher taxation for example, after WW11 the national debt skyrocketed because we had to fund the war, and because that debt increased so suddenly and unexpectedly doubled the usual GDO, that had to be paid back and it was done though higher taxation so much so that in 19440, the top tax bracket for people making over $200,000 a year was 94% which just so far know that would be bad.
So the main worth here is that the big ticking time bomb of debt and left unprovoked with lower interest rates and mild inflation this totally fine and it’s harmless if anything it helps our economy.

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