# Can the US get out of debt? **URL:** \ **Category:** Factual Questions\ **Created:** [April 2, 2003, 7:15pm UTC](https://boards.straightdope.com/t/can-the-us-get-out-of-debt/166027 "2003-04-02T19:15:53Z")\ **Posts on this page:** 4\ **Page:** 2
**Author:** ![handy](https://avatars.discourse-cdn.com/v4/letter/h/b5a626/32.png) [@handy](https://boards.straightdope.com/u/handy)\ **Post date:** [April 3, 2003, 4:45pm UTC](https://boards.straightdope.com/t/can-the-us-get-out-of-debt/166027/21 "2003-04-03T16:45:26Z")
Beforet his war started there was a little discussion about it costing so much that the US couldn’t pay for their bonds. Is this possible & what happens to bond owners if the US can’t pay them?? ---
**Author:** ![js\_africanus](https://avatars.discourse-cdn.com/v4/letter/j/87869e/32.png) [@js\_africanus](https://boards.straightdope.com/u/js_africanus)\ **Post date:** [April 3, 2003, 4:56pm UTC](https://boards.straightdope.com/t/can-the-us-get-out-of-debt/166027/22 "2003-04-03T16:56:27Z")
> [@](#): > > \*Originally posted by handy \* > \*\*Beforet his war started there was a little discussion about it costing so much that the US couldn’t pay for their bonds. Is this possible & what happens to bond owners if the US can’t pay them?? \*\* I think we’d just raise taxes or reduce spending elsewhere. I’m not an expert on this, but I think the markets really _need_ some government debt because the riskless asset is a pricing benchmark–it tells us what the cash now vs. cash later is really worth in the market, then risk adjustments can be added on. If the federal gov’t. defaulted, then we’d be in a right mess. I would enjoy reading the thoughts of someone more knowledgeable than me on this. ---
**Author:** ![samclem](https://avatars.discourse-cdn.com/v4/letter/s/a9a28c/32.png) [@samclem](https://boards.straightdope.com/u/samclem)\ **Post date:** [April 4, 2003, 2:40am UTC](https://boards.straightdope.com/t/can-the-us-get-out-of-debt/166027/23 "2003-04-04T02:40:34Z")
> [@](#): > > Basically, we’re just paying money to ourselves, and borrowing from ourselves. YOu mean that _gasp, Foreigners_ don’t own much of our debt. It’s certainly not all owed to _ourselves_. To pay off the debt, we’d have to increase taxes for a period of time(which is the opposite of what is gonna happen in the next year or two, due to politics). The other way to pay off the debt would be to lower expenses rather dramatically, while holding income the same. But you can’t dramatically reduce expenses when they involve entitlements, defense, etc. It _just, can’t, happen_. Yes, you could pay off the debt. But it would take more than a short time frame. It would probably take a national emergency, the like of which we haven’t seen since the self-sacrifice of WWII. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [April 4, 2003, 3:00am UTC](https://boards.straightdope.com/t/can-the-us-get-out-of-debt/166027/24 "2003-04-04T03:00:02Z")
> [@](#): > > \*Originally posted by The Controvert \* > Couldn’t the US government, expecting to last hundreds of years, invest some piddly amount (say a million bucks) and after a while, it would grow big enough to wipe out the debt and create an endowment to make taxation completely unnecessary? In order for any decent ROI, the interest rate and compounding would have to exceed the annual inflation rate, economic growth rate and government expansion rate. And where would the US Government invest that cool million? No bank or investment house would touch it. There is only one entity that would. Only the government itself would have the capability. 😃 [Previous page](https://boards.straightdope.com/t/can-the-us-get-out-of-debt/166027.md?page=1)