What are the main reasons why the US has been able to run up huge debt to GDP ratios (and implicitly gigantic budget deficits) without collapsing?

I'm not sure how much of this has been discussed here before, but I'm absolutely fascinated by this topic, and would love to discuss it. I have some hypotheses I'd like to explore with you all, but I'd like to hear your thoughts on this as well.<br><br>So, as we all know, the US government runs a gigantic budget deficit. At 7.75%, this is the fourth largest deficit in the world, sandwiched between Argentina and Mozambique. <br><br>As a result, the US debt to GDP ratio stands at nearly 160%, one of the highest in history, and the largest in over 100 years. <br><br>What are the main reasons why the US has been able to do this without collapsing economically? In my mind, the main reasons include:<br><br>1. High tax receipts - the US government is able to raise a lot of money from taxes, which reduces the need for borrowing to finance spending. <br><br>For instance, the US government is able to raise 17% of GDP in tax receipt, whereas other countries which have run high debt levels, like Japan, only raise about 15%, or countries like Argentina, that only raise 14%. The more the government can raise in taxes, the smaller the primary deficit. <br><br>2. Safe haven status - the dollar is a global reserve currency, and the US is perceived to be a safe haven in times of global conflict. As a result, the US government is able to borrow at very low interest rates, and at very long maturities. <br><br>Many countries that run high debt to GDP ratios, like Italy, are forced to borrow at shorter maturities, often at 2, 5 or 10 years. Even Japan, which has a larger debt to GDP ratio, is forced to run a very short yield curve, to keep borrowing costs down, and avoid a debt crisis. <br><br>Furthermore, the US government is able to borrow at a very low average interest rate. As of now, the average weighted interest rate on the US national debt is only 4.9%, compared to the 7% or so that the average 10yr bond yields. <br><br>Furthermore, while higher interest rates have increased the amount the US government spends on servicing its debt, this amount is still a relatively small proportion of government revenues. For instance, in 2023, the US government is spending 6.6% of outlays, or 1.4% of GDP, on servicing the national debt. <br><br>This is higher than it was a year ago, but is in line with historical norms, and is much lower than in other countries that have experienced debt crises. <br><br>3. Independent monetary policy - because the US dollar serves as a global reserve currency, and the US has a relatively closed economy, the Fed is able to run monetary policy independent of other countries, without fear of capital flight. For instance, the US is able to run looser monetary policy than other countries, when it has a more closed economy, and is less exposed to global trade, than say Italy or other European countries. <br><br>Furthermore, the Fed is able to run monetary policy independent of fiscal policy, which allows it to respond to economic conditions, without being constrained by the need to monetize the national debt. <br><br>4. Low levels of foreign ownership - unlike many other countries with high debt levels, the US government is able to borrow mainly from its own citizens. As of now, only 34% of the national debt is owned by foreigners, whereas many other countries have much higher levels of foreign ownership. For instance, in Italy, 37% of the national debt is owned by foreigners, while in France, this number is over 60%. <br><br>This means that the US government is less exposed to capital flight, in the event of a global economic crisis. <br><br>5. Strong institutional frameworks - the US has strong institutions, a stable democracy, and a low level of corruption, which makes it easier for the US government to borrow and run up debt. <br><br>What do you think? Do these reasons seem largely correct? Do they offer a good explanation for why the US has been able to run up such high debt levels without yet collapsing economically?<br><br>[Edit: thanks for the gold, kind stranger]