How can the USA incur such great debts and still move right along?

Question

If it were a business, wouldn't it have gone bankrupt long ago?

I really don't get how our government does it.

I'm interested in economical explanations.

Answer 1

Our government collects taxes. It pays those bills with the tax money they get from us. Anything that they can't afford to pay.. they sell government bonds.

The biggest buyer of government bonds are foreigners. They have money to spend, and they know with bonds, they will get their money back plus some interest.

In fact, the bond market is bigger than the stock market.

Answer 2

It's known as "Voodoo Economics". It began with the Reagan Presidency.

Answer 3

A) The Government has the power to (TAX) the people, a company does not.

B) The Government can issue (AAA) Debt and back it up with the ability to tax you to pay for it.

C) The Government can also print new money (in theory) to buy its debt with. Sticking the people with a devaluing currency in the process.

D) And lucky for us, the world uses the USD as an international reserve currency so demand is always strong for dollars in international circles.

Maybe reasons my friend, many reasons. But don't think they don't have consequences. They do.  The question is can the Government grow its economy out of the holes its digging? Or will our consumption and debt load overtake our ability to repay it?  

Debt to GDP is about 60% Peanuts compared to some countries.