I'll try to explain it in as few words as possible.
We have about negative 10 trillion dollars now. No pocket money saved, sorry
After interest (we basically borrowed this money), it'll cost us over 1 trillion.
We mostly get our money from China and even though all we can do is afford the interest on our debt, they still lend us money because if they didn't, we wouldn't buy their goods and their economy would also weaken even more. It's a rather vicious cycle.
Some of this money was just printed. Let's say we have 1 trillion dollars. Then we print another trillion. We now have two trillion, but it's basically still worth the 1 trillion (ya get me?), so each dollar's worth is decreased. In effect, this basically makes everyone pay (as they now earn "less" money and their savings are worth less) towards a collective sum. This sum can do what each person cannot do.
I know I grossly oversimplified this, but it would take pages to really type out the economics behind this (I've tried to explain this to one of my friends and after 2 hours, I still hadn't done myself justice) and I don't think anyone wants to read that.
We have about negative 10 trillion dollars now. No pocket money saved, sorry
After interest (we basically borrowed this money), it'll cost us over 1 trillion.
We mostly get our money from China and even though all we can do is afford the interest on our debt, they still lend us money because if they didn't, we wouldn't buy their goods and their economy would also weaken even more. It's a rather vicious cycle.
Some of this money was just printed. Let's say we have 1 trillion dollars. Then we print another trillion. We now have two trillion, but it's basically still worth the 1 trillion (ya get me?), so each dollar's worth is decreased. In effect, this basically makes everyone pay (as they now earn "less" money and their savings are worth less) towards a collective sum. This sum can do what each person cannot do.
I know I grossly oversimplified this, but it would take pages to really type out the economics behind this (I've tried to explain this to one of my friends and after 2 hours, I still hadn't done myself justice) and I don't think anyone wants to read that.