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I have a couple of questions regarding the national debt.
1) Theoretically, what would happen to the national debt if the Union breaks apart? If Texas secedes, will it inherit a share of the national debt, based on its population?
2) Is it the Chinese government which has bought the majority of the U.S. debt, or Chinese special interest groups? I've heard both claims, and am unsure.
Thanks.
I would assume that the debt "disappears".
It is similar to what would happen to a person with their debt.
That sounds DEFLATIONARY to me. YAAAAAY! :D We need a couple of millenia of just just good old tried and true "flation".<IMHO> ;)
I dont think secession would be possible execpt by a number of states.Quote:
Originally Posted by Gaius1981
I would be happy to make payment to eliminate debt share and secede.
Only three rules for new nation.
1. gold and silver coins only
2.no bill larger than 2 pages and must be understood at 8th grade level
3. Term limits and no pensions.
1) National Default - Credit ruined, unable to receive loans or borrow on the nation's credit. Doubtful that even domestic creditors would loan to it. It would resort to printing money, only it would be useless since no one values it from the get-go. A barter system takes over, where goods and services are traded for goods and services......sounds utopian, but the reality is much worse. Basically the middle ages.
If states left the union, no they would not automatically inherit the debt. The breakup of the union itself would cause national default. The credit of the individual states would still be mud though. There would be no "fair share" of the debt to be paid by the states unless they later on chose to, in order to improve the "new" nation's credit in the world. More than likely, a large portion of our debt would be "forgiven" if it came to that simply because we are a huge economic engine and keeping us chained down with lots of debt and horrible credit would be a huge drag on the world economy.
2) This one I am not sure about. Though I have heard the Chinese government itself has about 500 billion in dollar reserves. From the figures I have heard, that would mean Chinese citizens hold about 1.5 trillion in U.S. dollar denominated assets. I could be wrong though since it's all just heresay and guesstimates.