Everyone knows that the US is incredibly indebted. There is a debt of 36 trillion dollars, but their economic size is 21 trillion dollars. In other words, the ratio of debt to economic size is 171%. The debt is not shrinking, it is constantly growing. There are two reasons for this, firstly, the interest on the debt is already very high, America's current annual interest expenses are higher than the money it spends on national defense, and on the other hand, the US government continues to have a deficit. These deficits are also financed with debt. Imagine a company like this; the company is very, very indebted, the company cannot make a profit, and its losses are constantly growing. The interests of the debts it has previously taken on are piling up on it. You would expect this company to go bankrupt, wouldn't you? Similarly, many people expect the US to go bankrupt, but this is not very possible. Because unlike companies, the US is a state and the money this state prints is the world's reserve currency, and the US is the world's largest economy. Having a reserve currency means that debts, promissory notes, and contracts in many countries are always made in US dollars. Therefore, the collapse of the US could create a major economic crisis all over the world. They will not let it go bankrupt. So will it be able to pay this debt? What will they do is the big issue, but more importantly, how does all this affect you?

You may be thinking, why should the US debt make me nervous, but it is not. The US has no intention of paying this debt, but it does intend to manage it, and that way of managing it directly impoverishes you if you do not do the right things. You will learn very interesting data about the US debt, and on the other hand, how can you be affected by it? How should you protect yourself? We will see these together. Some people think that the US will try to pay its debts or that it will go bankrupt because it does not pay its debts. However, neither is true. The US will not go bankrupt because it does not pay its debts, I have just stated the reasons. The US has no intention of paying off the debt anyway. Because this debt is a tool that the US uses to manage both its own economy and the world economy. On the one hand, it is also a serious wealth transfer tool. Thanks to this debt, America manages its growth and inflation, and on the other hand, it transfers money from the poor to the rich with inflation. In other words, this debt is not a bomb ready to explode. It is a specially designed tool that puts economic pressure on those who do not understand the game. Perhaps America's most important weapon.

By the way, we are not sure if the debt is 36 trillion, it could be 50, it could be even less. Trump says that there are some tricks in the debt and that they have less debts around 2.5 trillion dollars. Part of the debt is the treasury's debts to other American government institutions, you can also cancel them. But no matter how you look at it, America's debt does not fall below 20 trillion dollars. In other words, the economic output of an entire year is not enough to pay the debt, and as you know, not all of that economic output is profit. The system will continue to work as long as the world's trust in the dollar continues. They will print money and pay the debts. The state has such a method and the decrease in trust in the dollar is not an issue on the horizon yet. What really concerns you is whether you can benefit from this giant system or are you in trouble?

Politicians and economists talk about a lot of things, but the mathematics of this business is actually very clear. The total amount of US dollars in circulation in the world is 21.2 trillion dollars. If the US debt is 36 trillion dollars, all the money in the world is not enough to pay this debt. If you try to pay this with taxes, let's say the total tax income of America is around 5-6 trillion dollars. That is not enough, and as you know, defense expenditures, health expenditures, all state expenditures need to be covered from that tax income. In other words, it is not possible to close this business with taxes. If you increase taxes, the economy will completely stop anyway.

So can America fall into default? That is also impossible, according to the IMF, 60% of global government reserves are still based on US bonds. A collapse here will create a domino effect. Nobody wants that, we could fall into a huge global depression. So can the US get rid of this by cutting spending? As you know, there is a team led by Elon Musk right now, the Doge team, and they are trying to cut costs. But it is not easy at all, and the cuts that will be made may still be insignificant next to this huge debt. For example, Elon Musk claims that we can increase savings up to 2 trillion. But a 2 trillion dollar savings by the state will only cover the state's deficit. In other words, it does not create enough new money to pay off the debt.

In addition, when we look at the data for the first two months of 2025, the expenses of the American State continue to increase. In 2024, the expenses of the state had increased by around 10% compared to 2023. So how can this debt be overcome? It can be overcome by growing the economy. This is the first method, that is, the economy grows a lot and the share of debt in that huge economy can decrease. Trump and his team have some plans for this. For example, they want tax cuts, they say that if we can reduce the state's spending and bring tax cuts, the private sector can create growth again. Thanks to that growth, we can both collect a little more taxes in total and the share of debt in the gross national product can decrease.

A similar policy was implemented during Trump's previous presidency. This earned companies around $220 billion in extra money. While doing this, let's also reduce the state's spending. Let the Doge project continue, but as I mentioned earlier, its impact is a little less. Because when we look at it, the debt has increased by $1 trillion every 100 days in 2024. In other words, it is difficult to manage this by producing more, growing the economy, and increasing efficiency. Maybe in the long term, but America's problems are more short-term. So what should be done? We need to print money. By printing money, I mean the American Central Bank will print money. It will go and buy debt bonds from the American treasury. Powell already gave the first message of this at the FED meeting on Wednesday.

They have now softened the monetary tightening a little. Monetary easing will also begin soon. In other words, the FED will print money and go and buy these bonds. These were done before. After 2008, the FED bought $4 trillion in bonds to overcome the problems of that financial crisis. Various rules were introduced later. Banks bought $1.8 trillion in bonds under Basel 3 rules and they are holding them without any problems. They are considering loosening these rules a little more so that banks can buy even more bonds, and on the other hand, America, as you know, created its own wealth fund. There is a similar fund in Japan. That Japanese fund has made a purchase of $1.7 trillion, both Japanese stocks and Japanese bonds. The money for that fund comes from printing money again.

The FED continues to print money, yes, it has slowed down a bit recently due to the fight against inflation, but the FED's balance sheet was $4.2 trillion in 2020, but it is now $7.1 trillion. In other words, it printed more money. It bought the debts issued by the American Treasury. It gifted that money to the state. This is basically what they will do, so yes, they are trying to solve some of it with savings, increasing incomes, and reducing taxes. On the one hand, there are also efficiency improvements that artificial intelligence and robots will bring. But we will see the effects of these in the coming years. In the short term, they have to print money again. The total debt they have to return this year is around $9 trillion anyway, and we also know that many foreign countries, especially China, do not want to buy American treasury bonds anymore. The US is currently negotiating with those countries on this issue. But it is not possible to see where it will reach. So they have to print money.

There are many examples of this in America in history. America was also incredibly indebted during World War II. The debt to gross national product ratio was 121% at that time. In 1980, this ratio dropped to 32% because they created economic growth. The annual economic growth was around 3.8% on average at that time. On the one hand, they created inflation, around 3-4%. Because inflation means that the value of money is melting. Thus, the real value of the debt is actually low, and on the other hand, they kept the interest rates very low, especially in the 1950s. The interest rate for 10-years was around 2.5%. However, inflation was 7%. Now, when we say inflation, of course, on the one hand, there are inflation data announced by the government all over the world, but it is mainly the inflation of consumer goods, that is, the inflation for the survival of the citizen. However, the value of everything you want to buy as an asset, such as gold, Bitcoin, real estate, increases faster than inflation. For example, when we look at the US, inflation is currently around 3%. However, when we look at the average stock prices, they are around 20% higher than last year. This actually shows that something bigger than inflation is going on. We roughly call this the debasement effect.

In the scenario I just described, America reduced its debts after World War II. The debt burden fell, but real wages, especially between 1973 and 1990, remained completely stagnant. In other words, citizens became poorer, their salaries did not increase, and if they did not make the right investments, their remaining wealth melted away. However, for those who already had wealth, for example, this has been happening since 2000. Those who had stocks, gold, and real estate became even richer. In that case, you should protect yourself. There are two ways to do this; First, you need to manage your savings well. Your savings should grow faster than the money the FED prints. Gold is one of the solutions that immediately comes to mind. Bitcoin is one of the solutions that comes to mind, buying stocks of strong companies is a solution here, I prefer American companies. Because there are companies among them whose incomes increase much more than inflation, and this can be reflected in their stocks.

In other words, you really need to learn about investing. You need to invest your money in the right places. If you say let me save my money, let it stay in dollars, let it stay in interest, none of these will save you. What you need to do is learn how to invest. Send your money to the right areas. But more importantly, you need to increase your income. Let's assume that inflation is somewhere between 4% and 10%, if your salary increases by around 3%, I am talking about inflation in US dollars here. Therefore, your salary needs to increase in US dollars at least as much as inflation in US dollars. That can only protect you, you need to go above it. Because the prices of the assets you want to buy are increasing faster than inflation. It may be good for you to start your own business. All data shows that people who start their own business can create an income increase of about twice as much as wage earners, and it is important to increase your efficiency. You may need to work more efficiently by taking advantage of automation and artificial intelligence and increase the money you earn per unit of time.

On the other hand, gaining the right competencies is important. For example, we know that technology positions and jobs in the technology field have increased income much faster than other jobs in the last 10 years. So, to summarize, the US national debt is not a cliff, it is not a bomb ready to explode, it is a mechanism. In order for that mechanism to continue, America needs to borrow more. In order to borrow more, it needs to create inflation. Inflation also reduces the real power of the debt. But if you cannot manage your income and the money you have on the side well, you will succumb to that inflation. That is why it is very important to develop your financial literacy. On the one hand, you need to invest, choose the right companies, the right funds and become a long-term investor so that you can protect yourself against this disaster. On the other hand, you need to increase your income, and on the other hand, you need to develop your financial literacy and become a better investor.