Do deficits matter? Does total US debt matter?

We have all heard some supposedly learned people claim US debt doesn't really matter as long as the USD is the world's reserve currency and the US is able to project its military might globally to protect US interests.


Do you think ^^^^ this is what most Americans believe?

I personally think deficits and debt ultimately do matter, even for the most powerful nation in the history of the world. I think history has a pretty good record of nations literally spending themselves into economic and financial collapse.

I think the US may be in an inescapable debt spiral that is accelerating due to the $1 trillion dollar cost annually of servicing the debt and that debt servicing is likely to exceed $1.25 trillion in 2026 unless severe austerity is enacted.

In 2007 total US debt was approximately $9 trillion and in 2025 total US debt is fast approaching $37 trillion. In less than 20 years the US has quadrupled its debt. It's projected by the OMB deficits will be $2 trillion in 2025 and by 2035 the US will have over $55 trillion of debt.

This^^^^ doesn't include total US unfunded liabilities, you throw that number in the mix and we're well north of $100 trillion.


Chew on this.

Totall US debt at the end of fiscal year 1971 was about $398 billion. This was a 35% debt-to-GDP ratio. In 1971 the median cost of a home was approximately $25k and the medan cost of an automobile was approximate $3700

As of September 2024, the US debt to GDP ratio was 123.1%. This means that the US government debt was 123.1% of the country's nominal GDP.....and the debt to GDP ratio is likely higher in February of 2025. In 2024 the median cost of a home was approximately $420k and the median cost of an automobile was approximately $50K

The median household income in 1971 was approximately $10k, the median household income in 2024 was approximately $82K.




The median cost of a home from 1971 to 2024 rose by a multiple of nearly 17. In that same period the median cost of an automobile rose by a multiple of nearly 14 and household income rose by a multiple of 8.

Can you see the problem?


I'll leave you with this.

In 1971 when the US dropped the gold standard the price of gold was $44/oz, 54 years later gold is approaching $3k/oz.

All of this ^^^^ tells us that deficits and debt do matter, unsustainable deficits and debt destroy the purchasing power of your hard earned money....... the Lords Of Easy Money understand all of this, they would rather you not pay attention.