To pay for debt with interest a new loan must be made. On global scale. Eventually old debt is to large to be paid with new debt. Then central banks start printing. Do i get this right? If so how do we get out of this?
You're not too far off. I recommend that every trader watch this video to get a better understanding of how the economic machine works. It's 30 minutes long and worth every second, so watch it when you have the time to really sit down and focus.
As long as the USD remains the world reserve currency, it should be fine. Once it's overthrown or replaced by some other currency (or perhaps a digital currency like Bitcoin?), then it's doomed. You either should get out of the US or go join a revolution.
Klaus says change zee rules, the joys of feudalism. Biden inflation is not in the norm, hostile gov't isn't beautiful. Get rid of bad gov't and the entrenched thugs. Productivity comes from freedom.
The ultimate result is currency destruction, a new currency. I suspect in all but name. The US basically becomes UK at that point. So bleh, but not dead.
The part of this that always fucked with me was one man' debt is another man's assets. I knew there was a reason I hated debt.
The optimistic scenario from a decline of the US or dollar will give rise to new systems led by the US and its allies. Pax Americana 2.0. Happy Memorial Day Weekend.
Ray Dalio also has a book called "Principles for dealing with the new world order" if you are looking for a more in depth explanation - beyond the 30 minute video Baron suggested. Although I'm about half way through the book I wonder if he couldn't have covered all of this in 30 minutes. He goes into exhaustive detail about all aspects of the financial systems that keep the world operating.
But to answer your question closer to home... Countries don't really work like a family (in every way) in terms of finance. It's rare for a country to ever be "free and clear" of all debt. The best measure of the level of debt is not the giant number that gets all the attention - but that number as percentage of GDP for a given country. In the US, we are currently receiving tax payment inflows that are at near record levels and are much higher than experts anticipated - for a number of reasons. We are also spending far more than anticipated. There are current debt levels, and then we create projections for future years about what those levels will be if we maintain/change specific entitlements/subsidies/outlays. Prosperous times and recessions (along with resulting fiscal and monetary policy) can skew these numbers off the normal course, but the country always hopes for responsible leadership that will balance the needs of the people with fiscal responsibility.