I am probably over-simplifying a lot of things, if not outright wrong about some of this, so please let me know where I'm off:
Obviously the US government spends a lot more than it takes in. To make up for this deficit it has to sell an ever-increasing number of bonds with higher interest. Even though the interest on the debt is massive right now, as of 2026 it's still feasible for the government to finance this off with more bonds and more future interest. However, at some point this has to become unfeasible- it's mathematically impossible for this to continue forever.
When it can no longer finance its debt, I see three options that it has:
1. (The most unlikely) The government somehow fixes its budget and starts operating as a surplus.
2. The federal reserve starts printing money to cover some of this debt.
3. The government stops paying off all of the bonds.
No matter which happens, don't they all result in a huge decrease in the purchasing power of the dollar? Faith in the government erodes no matter what.
Isn't this a massive issue that is going to start happening relatively soon? Or am I missing something here? I can also see how maybe this event is already priced into the dollar.