Some V good explanations in this thread. I have a very basic understanding of the situation and don't know enough about US domestic politics to tell you who is to blame and etc. etc. My basic understanding is that: To prevent another global economic meltdown, the US had to keep investors investing in it To keep investors investing it had to keep its credit rating To keep its credit rating it had to not miss its next instalment in paying off its big debt To not miss its next instalment, it had to borrow some money. No, it had to borrow LOTS and LOTS of money. Sounds crazy when put so simply, but I'm sure there are all sorts of complex economic factors involved which I simply do not know. Please correct me if I'm wrong, anyone.