Memes

Your comment stems from a fundamental misunderstanding of public institutions and how money works.

It doesn't matter that the debt is higher than the GDP if it's debt in the currency that the state creates. Japan has a debt of 250% of the GDP and it's always going to pay for it. Why? Because it's in Yen, and the Japanese public sector is the ONLY institution in the world capable of creating Yen. If they wanted, the Japanese central bank could quite literally perform 100 keystrokes on a keyboard, and repay all debt early tomorrow, at a cost of exactly 0 yen to the taxpayer.

Taxes aren't the way a state funds itself. Again, the state creates its own currency, why would it need tax collection to get that currency if it can create it at will at a keyboard's stroke? Taxes serve many purposes, such as forcing people to use your currency in the private sector (they will need that currency to pay for the taxes so it's the one they will use), such as disincentivizing certain behaviours (tax on tobacco for example), or such as reducing inequality (progressive income taxes), or also importantly, removing money from the private sector to reduce or prevent inflation. But the one thing taxes don't do is funding the state budget, since the state's budget is unlimited in theory. There are practical limits, but availability of currency really isn't one of them.

The American citizen won't spend a single dollar paying back state debt, in fact it's exactly the opposite. The state creates the currency with which it pays back the debt, and it's private citizens and corporations who the state owes the interest rate to. If you buy a bond for $1000 at an interest rate or 3%, next year you'll have $1030. The state, through debt, literally creates money for the private sector. It makes people and companies wealthier. Taxes make people and companies poorer, but taxes and debt are completely unrelated to one another, since the state really doesn't need taxes to pay the debt.

I fully agree with your analysis of the poor usage of the state budget and people not getting the welfare state they deserve by right, but that's not something that has to do with debt, it has to do with the government representatives not acting for the benefit of the majority but a select elite of capitalist owners. Debt is purely a financial tool that serves purposes such as creating money, or controlling the interest rates of the country so that people and companies will take more or fewer loans, which has an effect in the economy.

The other person who responded to me made a very all written post but it gets a core assumption completely wrong.

They seemed to think that tax revenue in some way has to happen for spending to happen. That's why they think GDP has anything to do with our ability to service debt. But the federal government creates money ex nihilo.

Money has to be created before it can be destroyed through taxation. Spending and back stopping creation of money by private banks through the reserve system comes first. You can't destroy something you haven't created.

It's sad, really. Economists and politicians have blinded everyone with what I think of as "the money delusion".

It doesn't matter if the money can be "gathered up" to be spent on things we need. We do not rely on the money of the wealthy. What matters is actual, real resources and services we can provide.

The national "debt" is a misnomer. That's the amount of dollars left in circulation that have not been destroyed through taxation, as well as the "dollars" that pay interest which we call bonds.

I'm glad to see at least a handful of other people who understand. Fight the good fight, fellow human.