How is U.S. debt resolved?

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Serious question is how is this finally resolved?

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US Dollar will be worth less than the Peso.

Mint a trillion dollar coin;

Take trillion dollar coin to treasury dept;

pay debt.

What could go wrong?

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Mint a trillion dollar coin;

Take trillion dollar coin to treasury dept;

pay debt.

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While you have the press out, mint 17 of those coins.

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How is U.S. debt resolved?

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For everyone minus the federal government debt is resolved by either paying it down or defaulting.

The federal government has three options to resolve debt. 1. pay it down, 2. default, or 3. have the Federal Reserve buy more treasuries by "printing" (aka QE in today's parlance).

Those are your options. So this begs the question; what are the results of each option?

1. Paying debt down is met and accomplished with production. So paying debt down is obviously the most economically healthy way to eliminate debt simply because value is added to the economy by production.

2. Defaulting is another way to eliminate debt. Defaulting is where sufficient production does not meet predetermined debt obligations. This is not necessarily bad if you look at from the perspective that defaulting is a process of eliminating malinvestment from the general economy.

3. Printing is another form of debt reduction enjoyed by the federal government facilitated by the Federal Reserve. However it's only a debt reduction on current obligations and an increase on future debt obligations. Printing relies on future production (i.e., future tax dollars) and future debt reduction though inflation. Besides inflation, I don't know what the future holds for this type of debt management.

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Defaulting is another way to eliminate debt.

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a tool that Donal Trump is very fond of

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Defaulting is another way to eliminate debt.

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a tool that Donal Trump is very fond of

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The Donald is not the only one. I would bet most all entrepreneurial millionaires/billionaires have used BK as finical strategy to achieve the best outcomes for themselves.

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In all sincerity, GP...it'll probably be a combination of all three.

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Absolutely.

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Doesn't this have to crash badly at some point?

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This question has come up quite a few times over the past few years and a few of us have taken on the task of trying to reasonably gauge when such an event would happen.

My own thought is that such a crash will occur right around the time when the Treasury is no longer taking in enough monies to pay just the interest on the debt. With current spending and interest accrual, that looks to be about 10-15 years from now (if interest rates go up though, it could be much sooner).

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How is U.S. debt resolved?

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The first step is to stop adding to the debt.

I'm reading your reply, and reading the your signature and laughing....need to change the Rick
Astley to Uncle Sam

My guess is that we continue to run up the debt until foreigners are no longer willing or able to refinance it. 10/15 years...maybe...maybe it can go longer. I think it depends on technological developments leading to productivity increases. Everyone is betting that the U.S. economy can grow at increasing real rates in future.

My fear and expectation is that will not happen. I think 'revolution' is not in the cards, but I do think the 'masses' will elect socialist/communists to pay off the debts with accumulated wealth of the 1%ers.

Bottom line is I think there will be serious social/political upheaval in the next 20 years. Huey Long/Chavez types who will make Obama look like Reagan.

ETA: is Bard something to do with the Bengal Bard...a wandering poet at LSU in the early 80s (and probably long before as well)