The national so-called "debt", all $20 trillion of it, will belong to the Republicans about four weeks from now. It cannot happen, but let's suppose they follow through on their neoliberal ideology and decide to pay the "debt" off. Just suppose. First, how would they pay it off and second, what happens to all that money when they do pay it off?
First, the easy part, paying the debt off. The national "debt" consists almost entirely of US Treasury securities held by individuals, businesses, retirement funds, and governments from around the world. All it would take to pay off the so-called "debt" is to cancel all the Treasury securities, transfer the $20 trillion out of the security accounts at the Fed, and give the money back to the people who invested in those securities. Poof! Debt gone. Balance zero.
Well, all of a sudden the world would be full of extra US dollars on the loose and millions of people who must figure out what to do with them. People had those $20 trillion in Treasury securities because they wanted their extra dollars protected in a safe, secure, virtually risk-free investment. Now, they must place those dollars elsewhere, but where? Very little of it would be spent because these were investment dollars, extra dollars that people chose to hang on to for various reasons. Some of it probably would go into other, more risky non-federal savings accounts. A trickle might be repurposed to more risky business ventures. But my guess is that the bulk of it would go into relatively secure foreign government bonds. Remember, the $20 trillion was "safe" money, no risk, small return money because people wanted it that way. They likely will look for another safe haven, even if overseas.
So, paying off the national "debt" does nothing for the US government except to remove its major inflation-fighting tool, put dollars into foreign accounts, strip the Fed of its major interest-rate setting tool, and probably force the Treasury into changing its accounting procedures and issue dollars strictly as a debit to a spending account with no incoming credits.
One thing for sure, it would prove to the debt-hawks that the so-called national debt really is a private sector asset and not the tax curse on our grandchildren that they think it is. Many would probably soon wish we had it back.
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