I was just wondering how the US (or any country really) can pull out 100 billion on a given occasion ? Is the treasury just “printing” more money, or are taxes raised? (let’s say 200million Americans are active, that’s still $500 per person) . Or is it just debt passed on to future generations? It goes without saying that I am not fluent in finance

  • xmunk
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    7 months ago

    Governments need to do things, sometimes expensive things, so generally all the debt capacity and revenue (i.e. taxes) goes into a big bucket and we spend out of that. So the real answer for you is “some vague combination of debt and revenue” that is, admittedly, an extremely unsatisfying answer, but it’s accurate.

    If you’re curious what our debt capacity is… well, there’s no answer to that. So long as we’re spending money in a way that we’ll get a return over interest (in this case, funding Ukraine can be measured against fighting Russia ourselves but it’s vague and hard to quantify) then debt is totally fine… when we start diverting a large portion of our revenue and debt to issue kickbacks (outlandish military contractors, unproductive tax cuts, political favor currying) that’s when we get into trouble.

    IMO, and this is highly subjective, our expenditures to defend Ukraine are pretty clear budgetary wins.