this post was submitted on 15 Dec 2025
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Explain Like I'm Five
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As far as I understand it it's essentially a humongous legal ponzi scheme. When the US gov issues new bonds they are using part of that revenue to pay back the interest on older issued bonds. In order to pay the interest on the new bonds this year, they use revenue from bonds issued next year. Ponzi schemes grow infinitely, so we're seeing the same with the US budget as well.
I mean, the government could run at a surplus and therefore not need to borrow money and start paying back the loans.
Its not really a ponzi scheme, but more that the US government has decided that it'd rather increase its debt rather than reduce spending.
As to OPs question. I think he's referring to taxes and government benefits, but is discounting the fact that taxes are not the only source of money for the government, through bonds the government accrues debts that can exceed the amount collected in taxes.