Comments by "seneca983" (@seneca983) on "The US Debt Situation Explained" video.

That's not a good comparison. A government doesn't earn 100% of GDP as income and it usually doesn't have (sellable) assets as collateral for loans in contrast to, say, a family with a mortgage.
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"Besides making interest payments, is there any other problem with having say, 1 quadrillion in debt?" What do you mean "besides"? With that amount of debt and, say, 2% interest the payments would be almost 100% of the US economy.
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@nicholaspoulos7694 "I am asking for any other actual real problems I understand interest payments are a limiting factor in debt." Another problem is debt rollover. Debt eventually matures and the bondholders have to be paid the principal of the debt, not just the interest. Usually you have to issue new bonds to cover the maturing ones. If your ability pay is in doubt such rollover might become impossible because not enough investors dare to lend to you.
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@grimaffiliations3671 "The government has all of its debt denominated in its own currency, you cannot default on a currency you control." No, governments can and have defaulted on bonds denominated in their own currency. One example is Russia which defaulted on its Rouble denominated bonds (but not its foreign denominated bonds) in 1998. Government borrowing in its own currency does have the theoretical option of printing more money to avoid technically defaulting on its debt but often that would just be a worse option that a default.
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@grimaffiliations3671 OP didn't mention currency at all. He only talked about "monopoly on violence". Both Greece and Argentina retained the control of their police and armed forces.
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"the US is 50% of the economy" What does that even mean?
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The Rothschilds are irrelevant. That family has a couple of billionaires but the world has many much wealthier billionaires.
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@deesmith6363 The Rothschilds are greatly diminished from their glory days. I think they lost about a half of their fortune in WWI.
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@deesmith6363 Of course a big fall in wealth doesn't completely stop them from financing someone or something but it does make them (nowadays) insignificant in the grand scheme of things.
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@grimaffiliations3671 "you don't issue new bonds to cover the maturing ones, you just give back the initial amount when your done paying interest on it." You need to get the money to pay the principal ("initial amount") from somewhere. Unless the government is running a surplus at least equal to the amount of maturing debt there needs to be at least some bond issuance (or some other form of borrowing) to cover what surplus cannot. "And the government doesn't need investors to "lend" to it" Yes it does.
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@grimaffiliations3671 "yeah, you get the initial amount from the bond buyer when they buy the bond. You just give it back when it matures." When the government receives the initial amount it isn't kept ready to be paid back when the debt matures. The money is (usually) spent on something. That's the point of borrowing. Thus when you pay back maturing debt you need some source of cash which is usually newly borrowed money. "Selling bonds is not done to finance the government" It is done to finance the government.
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@Full-of-bs I disagree. Firstly, debt-to-GDP is still a fairly informative metric even if you think something else is better. Secondly, I'm not sure debt service is a better metric since interest rates can easily change, at least if the country has a lot of short-term debt or in general debt close to maturity needing to be rolled over soon.
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@Full-of-bs "What’s your rationale that debt to GDP is a good ratio?" It's not perfect but it usually gives at least a rough idea of a country's financial position. It's also fairly unambiguous and readily available. "if Greece and the US have the same debt to GDP, but Greece’s debt has an interest rate 4X that of the US, then the similarity in the debt to GDP ratio is more misleading than informative" Possibly, though only if debt-to-GDP is also high, but debt service can be misleading as well. Debt service could be high in nominal terms due to high inflation or it might not be a big problem if (hypothetically) Greece was growing faster than the US. Also, there might be a possibility for the US rates to increase. "Interest rate changes would be taken into consideration when modeling debt service" Yes, you can do such modelling to take more factors into account (which could also include e.g. future pension obligations etc.). However, this can be far from simple. You'd have to do all kinds of decisions about what to include in models and how precisely to do it which requires a lot of judgment calls from the modeller. Most people can't necessarily easily find the results of such modellings. They can't easily judge how good choices the modeller made. They can't easily know if results between countries are comparable, etc. Still, doing this kind of thing can be well worth it if you're e.g. an institutional investor or something.
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@Full-of-bs I don't know how useful EBITDA is in evaluating companies but I'd argue debt-to-GDP is not at all useless (though it does have its limitations). I'd argue that it makes sense for e.g. average American voter to be aware of the debt level and take that into account when deciding who to vote for (though they can also take into account that the US may be able to handle a bigger relative amount of debt than some other countries). I don't expect the US to go to a debt crisis or anything but the rising debt level probably means that in the coming decades there will either have to be some spending cuts or tax increases that affect the middle class.
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"Tax the billionaires and people with over 100 million of assets." Those people are not very numerous so you're not going to raise much revenue that way. "Take the money out of the system." Taxes don't take money out of the system. The government spends it tax revenue. It doesn't destroy the money.
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@SS-ub5qz None of that is destroying money. Tax money doesn't get destroyed. Government pays its bills with tax money. The money just gets transferred from taxpayers to e.g. government employees and other people and organizations that the government is paying. That's not destroying money.
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@grimaffiliations3671 "Not true, federal taxes actually do get destroyed by they IRS." No, what you are saying isn't true. Taxes do get put to the general funds that the government spends.
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@grimaffiliations3671 "They are deleted by the IRS" They are not deleted by the IRS.
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"many other countries have greater gdp debt ratios" I think that's 8 countries. Does 8 count as "many"?
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Or Argentina.
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"The U.S. prints money indirectly by creating debt. Debt is repaid from the existing monetary pool, which means in short that the newly created debt can never be repaid in full." None of that is true.
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@junkerzn7312 In the case of base money the Fed just decides (explicitly or implicitly) how much to create.
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@junkerzn7312 "how exactly do they add the newly created money to the money supply again?" Basically they buy something with the newly created money, usually short term government bonds (though it can be something else too). "it is deployed as debt that must be repayed with interest" No, it isn't.
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There's deposit insurance.
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