dyhppy

we always heard "nation's deficit" or "CA is 53 billion in debt"

they're the one's that print the money. how are they in debt, who did they barrow money from and what's the big deal if they don't get out of the debt?

Nicotunes

The government is spending more than they are taking in in taxes and fees. You can't just print more money if there is nothing to back it up.

The big deal?? What do you think would happen to you if you were to handle your finances like this??

julius

Whenever someone buys a US Treasury bond, the government owes them the value of that bond. In other words, people are lending the government money. Historically that is a very safe financial decision because if the government can't afford to or refuses to repay its obligations, recovering your money from the government is probably the least of your worries...

That's the simplistic answer. Basically the government finances itself by taking out loans, just like everyone else.

B.C.

Uninsured motorist, Hit and runs, Illegal Footsteps, Illegal Medicare, Illegal aliens driving without a DL........Aliens w/o Insurance having kids, and not paying for hospital bills, causing debt and hospital closure.


This is 1 cause of debt.

magician

In fact, if you're the US federal government, you can. Since dropping the gold standard there's never been anything "backing up" US currency. It's one of the tools used in US monetary policy.

The problem with printing money is that it increases the money supply which results in inflation.

dyhppy

where does the gov get the barrowed money from?

it's not inflation if they don't tell everyone they're printing it j/k