<p>It depends.  Mathematically, you just need GDP to grow at the same rate as the debt grows, and then you can sustain deficit spending indefinitely. But this simply shifts the line of questioning to "can GDP grow indefinitely", and for most people the obvious answer is "no".</p>

<p>Ironically, the band-aid solution that most developing nations have taken is to grow the population through immigration (ironically because this approach is seeing significant geopolitical pushback).  It's well-known that more affluent countries have lower birth rates, and so immigration is the "obvious" solution to this.  But it clearly carries its own challenges.</p>

CC BY-SA 4.0
2020-12-10T12:27:24.287Z
Do you mean "developed nations"?
Dan
CC BY-SA 4.0
2020-02-10T15:40:36.017Z
2020-02-10T15:40:36.017Z
heh
<p><a href="https://www.thebalance.com/the-u-s-debt-and-how-it-got-so-big-3305778" rel="nofollow noreferrer">https://www.thebalance.com/the-u-s-debt-and-how-it-got-so-big-3305778</a></p>

<blockquote>
  <p>Over the long term, debt holders could demand larger interest
  payments. As the debt-to-GDP ratio increases, they’d want compensation
  for an increased risk. Diminished demand for U.S. Treasurys would
  further increase interest rates, which would slow the economy. </p>
  
  <p>Lower demand for Treasurys also puts downward pressure on the dollar.
  The dollar's value is tied to the value of Treasury Securities. As the
  dollar declines, foreign holders get paid back in a currency that is
  worth less. That further decreases demand, and many of these foreign
  holders of U.S. debt are more likely to invest in their own countries.</p>
  
  <p>At that point, the United States would have to pay exorbitant amounts
  in interest. The amount of federal spending today points to
  high-interest payments on the debt in the near future.16</p>
  
  <p>Congress knows a debt crisis isn’t far away. In less than 20 years,
  the Social Security Trust Fund won't have enough to cover the
  retirement benefits promised to baby boomers.17</p>
  
  <p><strong>That could mean higher taxes or curtailed benefits once the high
  U.S. debt rules out further loans from other countries. This would
  primarily affect retirees younger than 70, but it could also affect
  those who are high-income earners and not as dependent on Social
  Security payments to fund their retirement.</strong></p>
  
  <p>The U.S. debt affects several parts of our economy and many people.
  Understanding what the national debt is and where it is headed could
  help you better prepare for your own financial future.</p>
</blockquote>

CC BY-SA 4.0
2020-02-13T16:09:52.777Z
2020-02-13T16:29:21.063Z
2020-02-13T16:29:21.063Z
KarmaPeasant
<p><a href="https://i.sstatic.net/cxQys.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/cxQys.png" alt="enter image description here"></a></p>

<p><a href="https://i.sstatic.net/iUFiL.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/iUFiL.png" alt="enter image description here"></a></p>

<p>From <a href="https://en.wikipedia.org/wiki/National_debt_of_the_United_States" rel="nofollow noreferrer">this wiki page</a> we can clearly see that US national debt is growing steadily after 2010 and now it's larger than US GDP already (at the end of 2019). </p>

<p>Still it's commonly believed the debt is maintainable. At least, neither the Obama administration nor the Trump administration care to spend (enough) effort to eliminate the debt.</p>

<p>To overly simplify, the absolute death sentence to this debt problem is that the whole government budget is not enough to pay the interest, but I suppose the actual critical point arrives much earlier than that.</p>

<p>Regarding US debt problem today, the only referenceable example of to me is <a href="https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic" rel="nofollow noreferrer">Hyperinflation in the Weimar Republic
</a>. Yet they are only remotely parallel: Weimar Republic back then was hardly a major world power (politically and economically) while US being today's only global hegemony, let alone its Petrodollar policy and other global influence. </p>

<p>So I wonder, being such super power, what would happen to US domestic economy along the debt growing towards such critical point?</p>

<p>To make this question simpler, let's assume that during such progress</p>

<ul>
<li>There is no war between US and the other major powers against each other.</li>
<li>The external force disturbing US policy remains minimal.</li>
</ul>

<government-debt><political-economy><united-states>
What would happen to US economy before US government lose control over its national debt?
Rahn
# What would happen to US economy before US government lose control over its national debt?

(Asked by: username_0 on 2020-02-09)

[![enter image description here](https://i.sstatic.net/cxQys.png)](https://i.sstatic.net/cxQys.png)

[![enter image description here](https://i.sstatic.net/iUFiL.png)](https://i.sstatic.net/iUFiL.png)

From [this wiki page](https://en.wikipedia.org/wiki/National_debt_of_the_United_States) we can clearly see that US national debt is growing steadily after 2010 and now it's larger than US GDP already (at the end of 2019).

Still it's commonly believed the debt is maintainable. At least, neither the Obama administration nor the Trump administration care to spend (enough) effort to eliminate the debt.

To overly simplify, the absolute death sentence to this debt problem is that the whole government budget is not enough to pay the interest, but I suppose the actual critical point arrives much earlier than that.

Regarding US debt problem today, the only referenceable example of to me is [Hyperinflation in the Weimar Republic](https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic). Yet they are only remotely parallel: Weimar Republic back then was hardly a major world power (politically and economically) while US being today's only global hegemony, let alone its Petrodollar policy and other global influence.

So I wonder, being such super power, what would happen to US domestic economy along the debt growing towards such critical point?

To make this question simpler, let's assume that during such progress

* There is no war between US and the other major powers against each other.
* The external force disturbing US policy remains minimal.

**Tags:** government-debt, political-economy, united-states


---

## 2 answers

### Answer by username_1 on 2020-02-10. Score: 2

It depends. Mathematically, you just need GDP to grow at the same rate as the debt grows, and then you can sustain deficit spending indefinitely. But this simply shifts the line of questioning to "can GDP grow indefinitely", and for most people the obvious answer is "no".

Ironically, the band-aid solution that most developing nations have taken is to grow the population through immigration (ironically because this approach is seeing significant geopolitical pushback). It's well-known that more affluent countries have lower birth rates, and so immigration is the "obvious" solution to this. But it clearly carries its own challenges.

> **Comments:**
> **username_2**: Do you mean "developed nations"?  

---

### Answer by username_3 on 2020-02-13. Score: 0

<https://www.thebalance.com/the-u-s-debt-and-how-it-got-so-big-3305778>

> Over the long term, debt holders could demand larger interest
> payments. As the debt-to-GDP ratio increases, they’d want compensation
> for an increased risk. Diminished demand for U.S. Treasurys would
> further increase interest rates, which would slow the economy.
>
> Lower demand for Treasurys also puts downward pressure on the dollar.
> The dollar's value is tied to the value of Treasury Securities. As the
> dollar declines, foreign holders get paid back in a currency that is
> worth less. That further decreases demand, and many of these foreign
> holders of U.S. debt are more likely to invest in their own countries.
>
> At that point, the United States would have to pay exorbitant amounts
> in interest. The amount of federal spending today points to
> high-interest payments on the debt in the near future.16
>
> Congress knows a debt crisis isn’t far away. In less than 20 years,
> the Social Security Trust Fund won't have enough to cover the
> retirement benefits promised to baby boomers.17
>
> **That could mean higher taxes or curtailed benefits once the high
> U.S. debt rules out further loans from other countries. This would
> primarily affect retirees younger than 70, but it could also affect
> those who are high-income earners and not as dependent on Social
> Security payments to fund their retirement.**
>
> The U.S. debt affects several parts of our economy and many people.
> Understanding what the national debt is and where it is headed could
> help you better prepare for your own financial future.


---

