Your whole first paragraph is irrelevant. The banks that the US owes are part of the US banking system. Ok so?
This is another misrepresentation. You think it’s no big deal if treasury bills “lose a little value”?
If treasury bills lose value, that will begin a mass sell-off, which will cause the US dollar value to plummet. If there was a default, the US would lose its credit rating and not be able to get future loans. That would grind your government and industries to a halt.
Back on the initial point, foreign counties currently own almost a third of the US national debt, it is not “debt of the USA to the USA” - many of the additonal institutions (beyond the 1/3rd) that hold the debt (banks and investment groups) are also either foreign or international and not headquartered in the US.
In summary, the national debt is loans owed to many groups, a very large portion of which are foreign to the US. “They aren’t actually borrowing from anybody” is wildly inaccurate.
Lmfao yeah ok pal, the banks are going to start denying the federal government loans. Yeah right. I bet the Fed won’t even use their authority to set bank interest rates as a response, will they? Or maybe all the banks will just stop giving out all loans forever? What a crock of shit.
How on earth would the federal reserve adjusting interest rates improve the US’s situation if they were defaulting on loans? For starters, big loans like the ones the govt borrow are generally are not variable interest, they’re fixed rate. Second treasury bills have guaranteed maturity rates based on their yield, that’s why they’re generally considered a safe investment - again, the fed adjusting rates would do what? Zip. Except maybe make groups panic sell their bonds out of increased concerns of US stability.
The US was already downgraded by all the major credit rating firms, in 2011 and the most recent downgrade was May this year - they mostly came on the heels of debt ceiling raises by congress. Its not likely to happen anytime soon, but yes - if the US’ credit rating dips further, bankers and investors will not want to buy US treasury bonds. This has already affected the interest rate the US govt must pay on loans (increased them). Eventually if it gets low enough, the government will not be able to secure loans because the banks will consider them too risky, that’s how the banking system works. Somehow you seem to think the US govt runs the banks, or owns them? It don’t. It must pay back every cent it borrows, or the financial system of the US will circle the drain - just ask Greece, or Spain… Or… https://en.wikipedia.org/wiki/List_of_sovereign_debt_crises
Your whole first paragraph is irrelevant. The banks that the US owes are part of the US banking system. Ok so?
This is another misrepresentation. You think it’s no big deal if treasury bills “lose a little value”?
If treasury bills lose value, that will begin a mass sell-off, which will cause the US dollar value to plummet. If there was a default, the US would lose its credit rating and not be able to get future loans. That would grind your government and industries to a halt.
Back on the initial point, foreign counties currently own almost a third of the US national debt, it is not “debt of the USA to the USA” - many of the additonal institutions (beyond the 1/3rd) that hold the debt (banks and investment groups) are also either foreign or international and not headquartered in the US.
In summary, the national debt is loans owed to many groups, a very large portion of which are foreign to the US. “They aren’t actually borrowing from anybody” is wildly inaccurate.
https://en.wikipedia.org/wiki/National_debt_of_the_United_States#Holders_of_debt
Lmfao yeah ok pal, the banks are going to start denying the federal government loans. Yeah right. I bet the Fed won’t even use their authority to set bank interest rates as a response, will they? Or maybe all the banks will just stop giving out all loans forever? What a crock of shit.
How on earth would the federal reserve adjusting interest rates improve the US’s situation if they were defaulting on loans? For starters, big loans like the ones the govt borrow are generally are not variable interest, they’re fixed rate. Second treasury bills have guaranteed maturity rates based on their yield, that’s why they’re generally considered a safe investment - again, the fed adjusting rates would do what? Zip. Except maybe make groups panic sell their bonds out of increased concerns of US stability.
The US was already downgraded by all the major credit rating firms, in 2011 and the most recent downgrade was May this year - they mostly came on the heels of debt ceiling raises by congress. Its not likely to happen anytime soon, but yes - if the US’ credit rating dips further, bankers and investors will not want to buy US treasury bonds. This has already affected the interest rate the US govt must pay on loans (increased them). Eventually if it gets low enough, the government will not be able to secure loans because the banks will consider them too risky, that’s how the banking system works. Somehow you seem to think the US govt runs the banks, or owns them? It don’t. It must pay back every cent it borrows, or the financial system of the US will circle the drain - just ask Greece, or Spain… Or… https://en.wikipedia.org/wiki/List_of_sovereign_debt_crises
Lol bro doesn’t get it