Well there is this whole Jack Ryan movie, where the plot consists of an attempt by a Russian oligarch to buy up huge swaths of US debt, stage a fake terrorist attack and them dump it all on the market to cause a financial meltdown in the US. Not sure how feasable that is in real life though.
Foreign state ownership of US treasuries is a form of leverage those foreign holders have over the US economy. If, for instance, China were to decide they no longer want to hold treasuries, they can flood the Treasury market with supply, which would cause treasury yields (mortgage rates and many other interest rate benchmarks tied to treasuries) to spike.
Debt does not matter, but not for the reasons you state here. For the US, which runs on fiat currency, public debt is just private savings. This must be true by accounting. So reducing public debt is the same as saying you just reduce private savings.
Doesn’t sound so good now.
There are reasons to do this, like inflation, but it’s irrelevant to future obligations.
Debt is literally the only thing that matters. USG debt regulates world investment. This is blackmail from WW2. But there has been no economic growth for decades, no matter what our rulers have tried. There is shuffling and reshuffling. See “Chinese bond market grapples with ‘Japanification’”: https://on.ft.com/3CMbt29
Well there is this whole Jack Ryan movie, where the plot consists of an attempt by a Russian oligarch to buy up huge swaths of US debt, stage a fake terrorist attack and them dump it all on the market to cause a financial meltdown in the US. Not sure how feasable that is in real life though.
Foreign state ownership of US treasuries is a form of leverage those foreign holders have over the US economy. If, for instance, China were to decide they no longer want to hold treasuries, they can flood the Treasury market with supply, which would cause treasury yields (mortgage rates and many other interest rate benchmarks tied to treasuries) to spike.
Debt does not matter, but not for the reasons you state here. For the US, which runs on fiat currency, public debt is just private savings. This must be true by accounting. So reducing public debt is the same as saying you just reduce private savings.
Doesn’t sound so good now.
There are reasons to do this, like inflation, but it’s irrelevant to future obligations.
“Savings go overseas” just means we send foreigners printed paper and they send us real goods. It’s a great deal for us and bad for them.
Savings make room for private investment. They don’t fund it.
Debt is literally the only thing that matters. USG debt regulates world investment. This is blackmail from WW2. But there has been no economic growth for decades, no matter what our rulers have tried. There is shuffling and reshuffling. See “Chinese bond market grapples with ‘Japanification’”: https://on.ft.com/3CMbt29