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The U.S. government must refinance a considerable portion of its debt soon, with approximately $65 trillion needing attention within the next six months. This situation presents a harsh reality: the government has accrued debts amounting to $9 trillion but lacks the immediate funds to honor these obligations.
Options on the Table
Confronted with this financial conundrum, the administration is left with three primary choices:
Defaulting on Debt: This option is not realistic as it would lead to catastrophic consequences for the financial system.
Money Printing: The fear of exacerbated inflation coupled with past experiences making drastic money printing during the COVID crisis — where the government printed $5 trillion — precludes this option.