The budget deficit is the difference between annual revenue and annual expenses, while the national debt is the accumulated deficits over time.

Anyway, I think the concerns about the national debt are real, the problem is that nobody really knows exactly when it becomes a problem.

(disclaimer... I'm no economist so this is cobbled together from my readings over the years).

The general concern is that, at some point, the debt will matter to other countries that do business with America or in American dollars with each other bc it will signify our country lacks financial discipline.

The American dollar is the reserve currency of the world, meaning everyone does business in dollars. There's minimal risk that the $10M you spent today will lose significant value in a week or two. You can theoretically get all of your $10M back.

If that $10M thing you bought is still perfect a week later but is now only $9.8M, then you're going to have a problem. Eventually, you're going to want to do business in a more stable currency and those decisions can eventually lead to everyone dumping the dollar and choosing a new reserve currency.

(BTW, having alot of your currency circulating around the world is generally a good thing because it makes it cheaper for you to do business in the world. Being dumped as the reserve currency around the world would be a huge headwind to American businesses)

That $10M can become $9.8M in short order if inflation gets too high. The way we get high inflation is if our Federal Reserve *allows* it as a strategy to help pay the national debt but doesn't manage it correctly.

The Fed wants to keep inflation a little higher than 2% but there's alot of controversy that the official inflation numbers don't measure what matters anymore. That makes some people skeptical that the Fed can keep inflation in a manageable range.

Inflation raises the prices of goods but it is also beneficial because it raises the prices of assets and would result in greater tax income for the government, while the debts stay fixed. So the government takes in more money while it's expenses theoretically stay the same. But, if they're not measuring inflation correctly, or they don't move quick enough to raise rates (because people are going to hate seeing rates go upp), then you can have run away inflation.

Anyway, other countries have built large national debts through uncontrolled spending before and ended up trying to inflate their way out of debt. When they've lost control of inflation, they've caused financial catastrophes that's left people dead through hunger or unrest. None of those countries have been as large or as powerful as the United States so we've been on some "Who gon check me , boo?" shit for the last 40 years. But what's doomed other countries could eventually doom us.

<-><-><-><-><-><-><-><-><->
<-><-><-><-><-><-><-><-><->