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Straightforward counterfeiting
So the U.S. government is never going to be able to pay its debts, no way! The U.S. government is already bankrupt. The only way they've been able to keep going is by having nice printing presses that print Dollars, they can print them by the millions! They call it the "money supply". The government prints millions of Dollars in order to try to even pay the interest on its debts and to run its government
Never the principal. The American government is going more and more in debt all the time and will never be able to pay off that astronomical eighteen trillion Dollar debt!
What the big banks did during the housing bubble of the mid-2000s was in essence straightforward counterfeiting. The difference between what they did and regular counterfeiting was simply the kind of fake paper; regular counterfeiters print fake, valueless cash, while the banks were printing fake, valueless bonds.
Ted Rudow III, MA
What the big banks did during the housing bubble of the mid-2000s was in essence straightforward counterfeiting. The difference between what they did and regular counterfeiting was simply the kind of fake paper; regular counterfeiters print fake, valueless cash, while the banks were printing fake, valueless bonds.
Ted Rudow III, MA
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"Bankrupt" or negative net worth has to do with the size of debt relative to the size of assets, with "bankrupt" also used in a slightly different sense for "cash flow" difficulties. It doesn't refer to great debt, but greater asets, and sufficient cash flow to service the debt and ongoing operations.
Perhaps this would be easier to understand if you considered this from the point of individuals. My wife and I, FAR from wealthy, are in the unusual situation of essentially zero debt wile substantial assets (house, cars, savings, etc.). But most people, even those orders of magnitude richer than we are, not in that situation. Most people are in debt, and debt that they will never be able to pay off while a "going concern" (in their lifetime).
That does NOT mean that they are bankrupt. They may own a home AND have a mortgage debt against that, cars, AND car loans against those, cash value in their life insurance policies AND outstanding credit card debt greater than their savings. But meanwhile they have sufficient income to service all that debt besides providing for living expenses and luxuries. When they are no longer a "going concern", if that value of all their assets minus the net of all debts is on the plus side, weren't "bankrupt".
OK, they MIGHT instead choose to live without debt. Instead of that nice house some hovel tey could afford to buy with cash, beaters for cars, ditto, not buy anything they couldn't immediately pay for. They COULD choose to "cash out" now (paying off all their debt) and managing to live at the scale just described. Most people choose otherwise.
It isn't really different for a business or a country.