Why did US increase its national debt and should America expect an imminent default?

Igor Ivanovsky

Talk about the imminent collapse of the United States, about the fact that the soap bubble is about to burst, and the dollar will depreciate, has been going on for several years. So why is the US national debt constantly rising? And how can this threaten the world?
In the United States, a short-term increase in the national debt by another 480 billion dollars has been approved and now it is an astronomical 28.4 trillion. This amount already exceeds the annual GDP of America, but, most likely, it will only grow over time. Why is the US national debt constantly increasing?
Imagine a family: a husband, a wife, and a baby. For obvious reasons, only her husband works, he is the only breadwinner. But then he was unexpectedly fired without severance pay. And money for an apartment and food is needed right now. The only way out is to borrow money to cover basic needs, and then think about how to get this money back. So, the state can find itself in difficult economic situations in the same way, when there is nothing left to do but to borrow money. Otherwise, as in that family, citizens will be left without food even on the street (figuratively speaking).
You can borrow money from other, richer countri-es, international financial i-nstitutions and even private investors. The vast majority of countries do this, but not the United States. America only borrows from the Federal Reserve System (FRS). It is an amalgamation of several private banks that have the exclusive right to print dollars.
At the request of the US government, the FRS can print the desired number of green bills, and in exchange receive an IOU, which gives the right to receive the n-th amount with interest in 3, 5, 10 or more years. Then these bonds can be sold to any citizen, company or even country. So they go all over the world.
The US government gets the money it needs, but when it comes time to pay the bills, there is again nothing to give back. Output? You can, of course, declare a default. But it is better to borrow the amount again, only now it must cover both current expenses and accrued interest. Of course, the congressmen take the second path. The national debt is increasing, new bonds are issued and sold to foreign investors. History repeats itself from year to year.
This can continue exactly as long as creditors are confident in the solvency of the States. And the rating of trust in one of the world’s leading economies remains very high. On the other hand, there is an understanding that you cannot borrow indefinitely. Ther-efore, the government has set a “ceiling” – the amount more than which cannot be borrowed by law. But this ceiling turned out to be quite movable and had been raised many times. During the years of Trump’s rule alone, debt has grown by several trillion! Biden is also not shy about spending: more funds are allocated for health care, defense, climate issues than there is in the budget.
Each time, to increase the national debt, you need to get approval from Cong-ress. And this is an opportunity for political bargaining: when Democrats are in power, Republicans are sh-arply opposed to emission and vice versa. There are even those who are ready to default, just to annoy opponents. But so far it has been possible to reach an agreement, and the debt continues to grow. By the way, that one, that another party periodically want to get rid of this inconvenient procedure for agreeing the upper bar in order to borrow without any restrictions. But so far unsuccessful.
What will happen next? Talk about the imminent collapse of the United States, about the fact that the soap bubble is about to burst, and the dollar will depreciate, has been going on for several years. And they appear in the press with enviable regularity. However, experts agree that nothing terrible has happened, no one will allow default. Moreover, America is not the only country that lives on credit. The national debt of Japan is, for example, over 200% of GDP, in the UK – over 140%, in the eurozone – 120%. In addition, the United States has a tremendous degree of inve-stor confidence. Therefore, the printing press will continue to work, fortunately, there are all the possibilities for this.