Debt works exactly as I described. Debt can so long be piled on as the investor has faith in the credit of the debtor. When repayability is called into question then it is game over. Please note that investors do not have the Fed as counterpart but the American government. And the Fed nor any other central bank finances the government. The most recent fed package, for example, does not lower any of the debt by a single cent. It simply removed some of the funding bottlenecks in the financial system. The Fed expands or shrinks its own balance sheet, it does not extinguish a single dime of debt. By the way, my previous example of outsiders looking perplexed at America's behavior during this Corona virus crisis is not so far fetched, it is very conceivable that soon enough Canada will shut its entire border to Americans, this time not as a result of any American initiative. The US has its worst surge in infections and death yet to come while many other countries have already passed their worst times. It is because of a late response and poor policies at the beginning and because of a poor grasp of realities by the general populace. Has nothing to do with those who brought the disease to the US (mostly American citizens by the way not aliens) but because of irresponsible behavior of the population (example New Orleans). Equally, the irresponsible piling up of debt by Americans is unparalleled in any other nation today or in history. A rethink and change of attitudes has to take place to avoid the currently inevitable. Let's keep it professional, no need to make it personal just because you disagree with the message content.
Well, I would love to be proven wrong, but one would think think it's a little too late to stop any of the negative effects or consequences now, simply by stopping over consumption and not taking on massive debt. It's like setting your house on fire and than when it's 80% burned down, saying you won't set your house on fire anymore.