Dollar Dominance: How the US Can Keep Borrowing at Will

The United States' national debt recently surpassed $40 trillion, with interest payments on the national debt becoming its second-largest expense after Social Security.

According to Harvard economist Kenneth Rogoff, the US dollar's status as the world's reserve currency has allowed it to borrow extensively and for a long period. Rogoff, former Chief Economist at the International Monetary Fund (IMF), explains how the dollar achieved this hegemonic position and what being the world's reserve currency entails.

Rogoff notes that the US dollar's status as the world's reserve currency means it is widely used by countries for international transactions, including trade and investment. This gives the United States significant influence over global economic policies and allows it to borrow at favorable interest rates.