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Meh.. or what exactly? What happens and when?
I see this number trotted out every election year, and everyone gets their panties in a bunch, but I can't see what happens if we don't fix it.
Eventually the interest in the debt will grow too large to service. The government will have to print more and more money leading to hyperinflation. The entire global economy will be impacted as faith in the dollar collapses. The global economy slows and eventually switches to trading in the Yuan. The US loses a ton of it's soft power globally.
That sounds ominous. When does it happen? There must be a point at which it tips.
We have quite a while yet. We spend about 200 billion servicing the debt right now and have around 4.8 trillion in revenue.
The warning line is having a debt equal to your GDP. The US has a GDP of around 28 trillion but a debt of 34 trillion. So we are past that warning line, but by itself that doesn't mean anything.
For other countries it would signal to banks and other countries that it might be a bad idea to loan to them, but the US has a kind of special status in the global economy and this hasn't slowed down loaning so far.
Once it gets this bad there are only two ways out. Its pretty interesting cause in the 1800s both France and England were in similar debt to income ratio situations as we are now due to war spending but took different paths to fix it.
England tightened spending and had almost a century of lower economic growth to get back to near net zero debt right before WWI. Took a really long time. Was also helped out by explosive population growth, which isn't really an option for us at this point.
France didn't cut spending as much, and as a result had such massive inflation that the nominal value of the debt was close to like 1/100th of the initial value, bringing it to near zero as well. This also had the effect of wiping out any wealth not tied to physical assets. So like any family that was wrapped up in bonds lost everything. This is probably what's gonna happen to us