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Is it possible for cities, States, Countries to spend more money than they have? Why doesn't the USA collapse and go bankrupt?

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@ogb
Countries lend money from international banks, I would think.

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@ogb said
Is it possible for cities, States, Countries to spend more money than they have? Why doesn't the USA collapse and go bankrupt?
It's called debt.

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@trev33 said
It's called debt.
can there be too much debt? is it better to have a balanced budget ? what if the debt grossly exceeds the income , and the people can NEVER pay it off ?

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@trev33 said
It's called debt.
well... debt and the ability (or lack of) to collect on that debt. If you go over on your credit card. The credit card company and your government can/will force you to deal with that debit.

Not sure what would ever happen if the USA creditors tried to force the US government to pay all its debit but I'm pretty sure that the outcome would be bad for everyone and so the debit just continues to grow and grow. It would be nice if the government took it seriously and took steps to reduce that debit but if they did there would be a whole lot of 'end of term' politicians. Since politicians seem to have only one real goal (which is to continue being politicians) I don't really see this situation changing anytime soon (at least not in my lifetime).

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@ogb said
Is it possible for cities, States, Countries to spend more money than they have? Why doesn't the USA collapse and go bankrupt?
it's trickling down yer back
dripping right off yer sack
lemme tell ya sonny
ya cain't eat money

but the rich, yeah, you CAN eat them

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@ogb said
Is it possible for cities, States, Countries to spend more money than they have? Why doesn't the USA collapse and go bankrupt?
Complicated question and depends how far down the rabbit hole you want to go. The dollar is the reserve currency so other countries need dollars to trade. Also because the USA controls the dollar supply they can in theory just print money to pay their debts. Of course this has been tried many times before in different countries and always ends badly with hyper inflation.

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@ogb said
Is it possible for cities, States, Countries to spend more money than they have? Why doesn't the USA collapse and go bankrupt?
Why doesn't the USA collapse and go bankrupt?

The Federal government has the authority to issue paper i.e. treasury bills, savings bonds etc. to make up the difference between what it owes and what it has. This was vital in WW1 and WW2 when it was badly needed. Sadly, this power has been misused. Cities and States are usually not granted this authority.

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Pay for what you need, save for what you want.

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@great-big-stees said
Pay for what you need, save for what you want.
Politicians need to get re-elected and public funds are free for them.

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@ogb said
Is it possible for cities, States, Countries to spend more money than they have? Why doesn't the USA collapse and go bankrupt?
Because if you keep the velocity of money high enough, the debt turns into butter.

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Yes, as a matter of fact my wife and I had a lengthy engagement.

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@the-gravedigger said
Complicated question and depends how far down the rabbit hole you want to go. The dollar is the reserve currency so other countries need dollars to trade. Also because the USA controls the dollar supply they can in theory just print money to pay their debts. Of course this has been tried many times before in different countries and always ends badly with hyper inflation.
at the moment mr Sunak is printing sterling to keep this crap brexit island afloat.

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@ogb said
Is it possible for cities, States, Countries to spend more money than they have? Why doesn't the USA collapse and go bankrupt?
All debts are secured by assets of some kind.

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@ogb said
can there be too much debt? is it better to have a balanced budget ? what if the debt grossly exceeds the income , and the people can NEVER pay it off ?
Excellent topic, I'd like to see you duplicate it in "debates".

Yes, of course you can have too much debt.
The US debt is more than 7 times yearly revenues.
We have NO HOPE of fixing this debt bomb because the people that are supposed to fix it are the ones that keep making it worse.