It is extremely difficult to toss all of our personal and business experience with money out the window and view federal finance with a fresh perspective, but it must be done to properly understand the role of our government in our economy and society.

"The federal budget deficit is an estimate of how much money the federal government expects to make (revenue) and how much it expects to spend (expenditures or outlay) each fiscal year."

Firstly, the federal government has no product or service it sells to create revenue. This is because it is the monopoly issuer of the nation's currency and needs no revenue to enable spending. In fact, the US dollar is a product of federal spending of new currency into the private sector.

Without deficit spending, (creating more money than it collects), there is no net money in the private sector to denominate our commerce and contracts or to net retire private sector bank debt. When the currency-issuing government balances its budget it is leaving nothing to store value for the resources and labor it uses, effectively stealing them. This, and more so for budget surpluses, is not sustainable and should never be the goal of fiscal policy.

"The government finances the operation of its various agencies by issuing savings bonds, Treasury bonds, and securities. Tax revenues are then used to pay for those bonds when they mature."

How does one borrow what doesn't yet exist? (Ditto for collecting taxes) The currency must be created in the private sector before either is possible. Forced taxation drives the initial need for the currency in the private sector and serves to regulate the total money supply, but is "never" a revenue source that enables federal spending. Rather, spending "funds" both tax payments and bond sales.

"When the government can’t meet its obligations, it issues more debt."

The currency-issuing government can never involuntarily fail to meet its obligations as long as those are denominated in the currency it creates at will, even with zero revenue. Bonds are a service/benefit provided to encourage thrift and provide further incentive to conduct commerce with our government. They also serve to allow the central bank (Fed) to manipulate bank interest.

"But if the deficit is too high, it can threaten economic growth and lead to increased inflation."

Without a deficit, "net" economic growth is not possible. Private sector bank debt spends much like government-created money, but it can never net retire the debt that created it. It also cannot be net saved as a store of value from our productivity (bonds) or settle federal tax obligations.

Little of this is visible at the granular level of our daily lives where money is just - - money. However, at the macro level of the economy it becomes evident that the only way to keep an economy afloat without sufficient injection of new money is to maintain a constantly growing GDP that allows private sector debt to be "rolled over" into new debt.

Any hiccup in such an economy causes a chaiin reaction of default and cutbacks that results in injecting federal money via automatic stabilizers and stimulus that would have been unnecessary had the injections been pre-emptive and targeted toward positive growth, not negative triage. Such an economy will be prone to asset bubbles and extremely overleveraged in private debt. Sound familiar?

"Increased borrowing and high deficit spending over the past several years has increased the federal debt to levels beyond the capabilities of our economy as stands today — the interest alone on the current debt is projected to reach $7 trillion in the next decade."

If placing links in comments weren't such a pain I would flood this thread with articles and dire warnings from "esteemed economists and experts" that date back to the founding of our nation, all of which have yet to materialize. At some point your obvious inability to tell us "when" the economy will fail calls iinto question your ability to tell us what will cause the predicted failure.

"As the government gets deeper and deeper into debt, it becomes more difficult to borrow more money. And when federal debt increases, it affects the federal interest rate, or funds rate."

This is completely unsubstantiated in fact. It is precisely because the US government can create money to pay any obligation that it is the choice of investors who have surplus dollar denominated assets. Their alternative is to hold cash reserves without interest. Considering that those reserves are the product of the debt the investors will be purchasing it really is a good gig to have. Federal deficit spending "funds" bonds, not the other way around.

" When the national debt increases, everyone has to pay more when they borrow money, which makes things like mortgages and private business loans more expensive."

You should give wider spacing between contradictions. Does the current overnight rate set by the Fed determine loan interest rates or is it the bond vigilanties and credit rating agencies? I don't think it is too much to ask for you to pick a side to land on.

"As the government borrows more and increases the amount of money it owes, it also increases the likelihood that it might default on its obligations."

The issuer of a sovereign fiat currency never faces default. It can always create money to satisfy its obligations. The rest of your screed is simply an accumulation of further contradictions from your own statements, which should invalidate any opinion you might have.