Why The U.S. Won’t Pay Down Its Debt

CNBC
CNBC
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Published 2023-09-10
The U.S. national debt is nearly $33 trillion as of early September 2023. Every year since 2001, the U.S. government has spent more money than it takes in, which means it has to borrow money to make up for the difference. The national debt is frequently discussed as a danger to future generations, but some economists say there’s no reason to get the national debt down to zero. One reason for that is without the debt, there would be no federal government securities, such as Treasury bonds, which provide investors a safe place to park their money while accruing interest. Most economist warn, however, that there’s a balancing act when it comes to the national debt. Watch the video above to learn more about why the U.S. can’t get a handle on the national debt and whether it even has to.

Correction on Sept. 12, 2023 at timecode 0:11: The voice over has been updated to reflect the national debt grew $300 billion between July and September 2023.

Chapters:
00:00 — Introduction
01:39 — The role of debt in the economy
03:28 — How debt can harm the economy
06:17 — The global economy

Produced by: Charlotte Morabito
Edited by: Amy Marino
Animation: Jason Reginato
Supervising Producer: Lindsey Jacobson

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Why The U.S. Won’t Pay Down Its Debt
All Comments (21)
  • @NicholasBall130
    I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.
  • @RonaldPaul-rs6kt
    Don't fret, the debt ceiling always goes up. I wonder if 2008 crisis survivors had it easier. I'm concerned about the stock market, I've lost $35,000 this month, and my income is down. Worried I won't save enough for retirement as I can't add to my savings.
  • @gagnepaingilly
    Since the debt crisis could unleash carnage on the stock market leading to economic downturns. We need to be prepared for potential market volatility. how can I secure my $600K stock portfolio against declining?
  • @brianwhitehawker1756
    We can't ignore the potential impact on portfolios. Bonds are often considered a safe haven, and if they crumble, investors like me might scramble. I’ve been investing for 11 yrs and my $1m portfolio has never been this depleted, how i do hedge this?
  • @davidj6755
    The government’s debt doesn’t work like household debt because a household can’t print more money to pay its bills, lowering the value of everyone else’s money.
  • @Legoman69469
    “Borrowing is a way to not burden the current generation with debt”. So burden the next generation with our debt?
  • @planewire2153
    They failed to mention that 70% of our tax revenue would end up paying only the interest payments
  • @FabiWann
    "It's better to burden the future generation with debt (taxes) than to burden the current generation with taxes." Fixed that line for you CNBC.
  • @naturalselfyoga1617
    If the debt doesn't matter then the US should stop taxing us. Just keep borrowing the money they spend.
  • @northerniltree
    "If you don't have it, you can't spend it" is grandfatherly advice no one has ever heard.
  • @398robin
    You remember in 1913 when the Federal Reserve set up our current money system. Unfortunately, our government has been spending more money than it takes in taxes for many years. Our National Debt is now more than $34 trillion dollars. Our money is not backed by anything, and it could easily crash with so much inflation now.
  • @MylesShank
    CNBC: “don’t trust professional economists… trust us…”
  • @VideoSiteAccess
    What I got from this video as to the why’s: 1- Everybody else is doing it. 2- Spending in the now is more important than saving for the future. 3- The US is too big to fail. 4- Nothing that bad is happening.
  • @LuccaWeber1
    It is a government inspired crisis this time. The Treasury have to sell Bonds to cover the trade imbalance and the government spending imbalance. In order to sell them they have to raise interest rates and the old long-term, low risk, low interest, AAA investments (including Treasury Bonds), held by the banks (often due to government regulatory policy), become next to worthless. The next milestone should be soon when the government issue a new batch of Bonds.
  • @RedShipsofSpainAgain
    Me: owes $50,000 in student loan debt that the US Government demands be repaid, or my entire life is ruined financially. US Government: owes $33 TRILLION and doesn't have to repay any of it. I love this country. There are 2 sets of rules. And the US government gets to play by the other set of rules.
  • @johnthicks8568
    I'm going to start telling the bank that my debt isn't real... it's just an accounting record 🤣
  • @furanduron4926
    Imagine being so bad with money that you can steal 40% of peoples income and still end up in 33 trillion dollars of debt.
  • @ericeandco
    They say the debt is merely an accounting record like it doesn’t mean something. Your rent and credit cards are an accounting record of your debts. Once that debt gets too high see what happens.