But it is. The federal government as the business that it is BORROWS MONEY. You can look up how much we owe China. There has been occasions in modern times when the federal international credit rating dropped. That means the cost to borrow goes up. It is the same with the individual states.
Try to focus. Households, businesses and governments can choose to incur debt. Ehen the debt comes due, all three can choose to either repay the debt or try to refinance it, The difference is that households and businesses sources for repayment are saving, or selling assets. Governments have these options plus the options of taxation and printing money (at the national level). So gov’t finance is not the same as household finance.
Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.
Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.
Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.
You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.
If we default to China then it goes to international courts like any bankruptcy.
I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.
When a business needs to fund a project and is short of cash it borrows or issues stock.
The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.
Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.
It is all based on future revenue business or government.