💰National debt is the difference between spending and revenue, and the US borrows money through the sale of government bonds.
📊The debt-to-GDP ratio is an important metric to evaluate a country's financial health.
💵The US follows Modern Monetary Theory, which allows it to spend and borrow in its own currency without going bankrupt.
💡Taxes create demand for the US dollar and are used to implement policy objectives.
🔒Government bonds prevent interest rates from dropping too low.
What is the US national debt?
—The US national debt is the total amount of money that the US government owes to creditors.
How does the US government borrow money?
—The US government borrows money by selling government bonds to investors and foreign governments.
Why is the debt-to-GDP ratio important?
—The debt-to-GDP ratio compares a country's national debt to the size of its economy and is used to evaluate its financial health.
What is Modern Monetary Theory?
—Modern Monetary Theory is the idea that countries can spend and borrow in their own currency without facing bankruptcy.
Why do taxes create demand for the US dollar?
—Taxes create demand for the US dollar because they are required to be paid in US currency.
00:00$33 trillion: that's the US national debt, and yet the US government doesn't prioritize paying it off.
03:18The US follows Modern Monetary Theory, allowing it to spend and borrow in its own currency without going bankrupt.
06:01Taxes create demand for the US dollar and are used to implement policy objectives.
09:17Government bonds prevent interest rates from dropping too low.
09:55The US government will not pay off its debt tomorrow to avoid hyperinflation.
