What would happen if the world stops buying our debt?

An article that I found on the internet and I have already posted on here that it might be beginning to happen.

One thing you can count on is there will be any majors cuts in spending and raising taxes will not solve the problem. 

SO WHAT IS THE SOLUTION?

12 Answers

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  • Anonymous
    2 months ago

    We'd go on a military rampage.

  • Anonymous
    2 months ago

    The US credit rating has already dropped and continues to be less secure as the debt piles up. The US has enjoyed world currency status for decades. If it loses that f/ too much debt, the results will range f/ bad to catastrophic. 

    Clinton balanced the budget by spending less and taxing the rich. Biden can consider new taxes like legal weed and gambling in addition to other tools like big savings f/ criminal justice reform where most of the inmates are non-violent drug users who should be in rehab at their expense. He's definitely going after tax money trump irresponsibly gave away to the rich as the deficit doubled. The rest of us will keep what little good the tax giveaway helped us. 

    Obama let the bush tax cuts expire at $450K ... he was shooting for $250K but the reps got in the way. Obama slashed 2/3 off the then gwb record $1.4T deficit.

    As you can see, it's fairly complicated. But the more facts you learn, the more obvious it is the dems are far more fiscally responsible. 

    The reps curry favor by irresponsibly giving tax money used to pay the bills away largely to the elite who reciprocate w/ campaign donations.

    Incidentally, tax giveaways are fine when in conjunction w/ spending less (or new taxes) as compensation. The reps don't do that. They jack up the deficit and debt on a large scale (starting w/ Reagan), pass the mess to the dems and scream, look how they raise taxes!

  • 2 months ago

    Trump was fixing it, but you chose Biden.

  • 2 months ago

    most of our debt is owned by domestic players, not foreigners.  if the world ceases to hold or buy our debt, the value of the dollar will decline and foreign goods will inflate in price here ... which will result in some jobs returning to the US ... can't complain about that, can we?   --grampa

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  • 2 months ago

    This should be a priority in the US.  The Dollar is the currency of choice in the world.   As it is now, every family that actually, really pays income taxes owes about $600,000 of the national debt.  When that approaches a million dollars, the entire discretionary US income from tax receipts will be needed just to pay the interest on $35 trillion.  If the world loses faith in the dollar they will demand higher interest and that will make it worse.

  • 2 months ago

    Only about 25% of our debt is foreign owned and it is all in USD.

    It is not in any countries interest to stop buying out debt. It would hurt them more than it would hurt the US 

  • ?
    Lv 7
    2 months ago

    Most of America's debt is in the form of fixed term credits.  The USA has to roll over the capital and interest into new debt just to survive and that's before borrowing to fund its huge budget deficit.  If the world (China in particular) stopped buying American debt, the USA would default and the dollar would collapse.

  • ?
    Lv 7
    2 months ago

    The debt situation on the national level is more far more complex than just a simple loan.  In simple terms, when people stop buying national debt the Federal reserve steps in literally just offers to lend the money out of funds they create out of thin air.   Mind blown?  Thinking it can't be true?   It happens every day.    

    The next good question to ask is why doesn't this cause out of control inflation?   The answer lies in other countries are issuing loans (out of thin air) at a higher rate relative to the size of their economies to the USA.  Investors see this and don't really see a better alternative for their investments and keep investing in the USA.  How long can this continue?  I'm not sure but it shows no sign of slowing down.  

  • 2 months ago

    They will stop getting our stuff.  Countries that buy our debt, have a vested interest in keeping us solvent.  It would be like putting a hole in their own boat for them to shut that down.  They can't sink us, without taking themselves down with us.  There is too much money involved.  They are "Pot Committed" in bettor's parlance.

    That said, they can still sell or slow down their purchasing, but they would have to do it gradually, which would give us time to reciprocate.  A malicious and catastrophic run on our financial system could still happen, but it would have to involve a willful attempt to destabilize the entire world.

  • Anonymous
    2 months ago

    the US is litterally borrowing money from countries around the world to give huge tax breaks to bilionaires . it's time to BRING BACK the pre reagan era fed tax rates on corporations and the rich . 

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