- Individual Taxes
- Corporate Taxes
- Gasoline Taxes
- Sales Taxes
- Capital Gains Taxes
- Estate Taxes
- Import/export Tariffs
- Fines and Fees
- Selling Treasury Securities (bills, notes, bonds)
Treasuries have different maturities and are seemingly stable. Banks are required to hold a certain quantity of Treasuries as a provision against market collapse. Treasuries are popular in the global marketplace because the US dollar is the world's reserve currency... and, got that status because of all the spending that the US did during WWII.
Foreign investors own half the US debt and the majority foreign investor is CHINA which owns about $1.1 Trillion.
HOWEVER...
if the US debt gets too big or the rest of the world loses faith in the US and the dollar is no longer considered as the world's reserve currency, the the US will have a problem paying the interest it owes or much worse lose its ability to borrow more money.
Another scenario might be numerous countries selling off their Treasuries all at once... if that happens then it would be more difficult for the US to borrow money and the money that it did borrow would be most costly.
The biggest concern with growing debt is the potential for inflation that might become inflation out of control and that would cause the global to reassess its view of the US and the strength of that economy. Since China has the second largest global economy, the world could turn to China for stability, turning their backs on the US.
UNFORTUNATELY, no one seems to be concerned that an outcome like this will ever take place in the US in the near future.
