[panaxanax]

I’m not an economist, so help me out here, please.

If our National debt is over 11 Trillion and growing by the second, aren’t we already banckrupt? It seems to me that all that remains is to sign the papers and surrender to our debtors.

[JasonC]

Debt is not negative net worth, it is merely one way in which assets are financed. The treasury normally receives an income of 20% of the economy, which is $14 trillion and normally grows 5-7% a year in nominal terms. When it chooses to spend that income is a decision it can make any way it likes by using debt financing. Debt service is less than 10% of that revenue stream.