NationStates Jolt Archive

Let's say some malignant person or consortium, working over decades, obtains a large portion of the US debt. Let's say... 20%. They do this in such a manner, through various subsidaries and whatnot, that it is not apparant that they are the holders of this, until they come forward, with documented proof, and demand that the US pay the money, immediately, in cash.

What would happen?

Let's say some malignant person or consortium, working over decades, obtains a large portion of the US debt. Let's say... 20%. They do this in such a manner, through various subsidaries and whatnot, that it is not apparant that they are the holders of this, until they come forward, with documented proof, and demand that the US pay the money, immediately, in cash.

What would happen?

He would be cutting his own throat.

He would be cutting his own throat.

Explain?

Explain?

Maybe he means that the person would be effectively saying "please assassinate me".

Maybe he means that the person would be effectively saying "please assassinate me".

Ah. Well, the solution there would be to make it perfectly clear that he had willed the debt (sounds odd, doesn't it?) to someone else with the same intent. I hope that somewhere along the line, the US public would say 'you know, these people wanting the government to pay them keep dying mysteriously. I need a hamburger.'

Let's say some malignant person or consortium, working over decades, obtains a large portion of the US debt. Let's say... 20%. They do this in such a manner, through various subsidaries and whatnot, that it is not apparant that they are the holders of this, until they come forward, with documented proof, and demand that the US pay the money, immediately, in cash.

What would happen?

And what could he do if the US govt said, "no"?

The US would have to pay up on the debt, or, so says the Constitution.

The US would have to pay up on the debt, or, so says the Constitution.

The time frame for repayment is not specified, though. He and his descendants would probably see payments made, but not the entire bulk sum, especially in cash.

The US would have to pay up on the debt, or, so says the Constitution.

Since when did THAT mean anything? The Constitution, if appearances are to be believed, is very expensive toilet paper. And probably not very absorbent, even.

Since when did THAT mean anything? The Constitution, if appearances are to be believed, is very expensive toilet paper. And probably not very absorbent, even.

Who'd want to wipe their ass with animal skin anyways.

Who'd want to wipe their ass with animal skin anyways.

I think it's one of those 'we do it, because we can' things.

And what could he do if the US govt said, "no"?

Well, if the US government says 'No, we're not going to pay our debt' I imagine that there might be some reluctance to further lend the US money.

I think they'd pay up, but they'd loan the money from someone else.

Also, 20% of the national debt in cash is not phisically possible, because that amount of cash does not actually exist. 20% of $8,522,088,696,146.03 (source: Natl Debt counter (http://www.brillig.com/debt_clock/)) = over one billion dollars, if my math is correct. I am quite sure that that much money does not exist in circulating US Dollar bills. Not to mention that that much money, even in the largest of bills, would not be able to be carried by less than a small army.

Maybe he means that the person would be effectively saying "please assassinate me".That is what it sounds like to me as well:sniper:

I think they'd pay up, but they'd loan the money from someone else.

Also, 20% of the national debt in cash is not phisically possible, because that amount of cash does not actually exist. 20% of $8,522,088,696,146.03 (source: Natl Debt counter (http://www.brillig.com/debt_clock/)) = over one billion dollars, if my math is correct. I am quite sure that that much money does not exist in circulating US Dollar bills. Not to mention that that much money, even in the largest of bills, would not be able to be carried by less than a small army.

Well, they can make one BIG billion bill, like they did in Simpsons...

Let's say some malignant person or consortium, working over decades, obtains a large portion of the US debt. Let's say... 20%. They do this in such a manner, through various subsidaries and whatnot, that it is not apparant that they are the holders of this, until they come forward, with documented proof, and demand that the US pay the money, immediately, in cash.

What would happen?

The US would inflate it's currency and pay him.

They would have a short-term recession, but the one who had demanded the money would be totally shafted.

Well, firstly the U.S. wouldn't give a shit. They would say, as Soviestan said they would "Fuck you. We can repay when we want to.". But then that guy will use that debt to show the American people that their government isn't paying their debts, so why should they? The American people will stop paying taxes. The government will then pay up, so that they can get their taxes back.

Ok, I think that's just from my sleepiness... I might be high too... Who knows...

There are governments that hold a significant portion of the national debt. China holds massive amounts. The problem is when an economy is as big as the US if anyone called in the chips, especially a government that lives on exports like China, the whole world would go down. This was the same arguement made a few years ago when the US guaranteed loans to Chrysler Corp because if they went down they were big enough to take down the whole US economy. But if they did call in the chips, the US would hyper inflate their money and pay it off. Of course that would mean that for the people on the street, their money would become worthless. Sort of like the German money after the war where it took a wheel borrow of money to buy a wheel borrow of potato. This has happened in many countries where money is issued in "bricks" of 100/500/1000 bills with a wrapper around them. In today's world it would just be more blips on a computer.

With the debt generated during the last 26 years of "conservative" rule, such hyper inflation is very possible.

The time frame for repayment is not specified, though. He and his descendants would probably see payments made, but not the entire bulk sum, especially in cash.

government bonds probably have some clever clauses in them like 'no more than x-amount may be reclaimed at once' or something. what i mean is, from a legal standpoint, i'm sure the govt could cover their own asses

They couldn't. Treasury bonds are issued for set periods of time and are guaranteed to be paid in full by the government when they reach maturity; the type of bonds most commonly used to finance debt are 10-year and 30-year bonds. Regardless of whether or not they held so much debt they could only collect on it when the bond reached maturity; treasury bonds can only be redeemed at maturity and their interest is disbursed (for the 10-year) at 6-month intervals.

So, if they wanted to wait between 10 and 30 years to recieve six-month disbursements of interest and only collect on the principal at maturity, they're welcome to. But that's definitely not going to enable them to bring down the US government, especially when bonds are so actively traded.

It's not possible to cause a default on US debt...the only people who could do that are the Congress and the President with their irresponsible, unsustainable spending.

They couldn't. Treasury bonds are issued for set periods of time and are guaranteed to be paid in full by the government when they reach maturity; the type of bonds most commonly used to finance debt are 10-year and 30-year bonds. Regardless of whether or not they held so much debt they could only collect on it when the bond reached maturity; treasury bonds can only be redeemed at maturity and their interest is disbursed (for the 10-year) at 6-month intervals.

So, if they wanted to wait between 10 and 30 years to recieve six-month disbursements of interest and only collect on the principal at maturity, they're welcome to. But that's definitely not going to enable them to bring down the US government, especially when bonds are so actively traded.

It's not possible to cause a default on US debt...the only people who could do that are the Congress and the President with their irresponsible, unsustainable spending.

On the other hand, if the US refuses to pay a debtor, they probably lose some credibility, whether or not that person had the legal right to demand that money at the first place,

Let's say some malignant person or consortium, working over decades, obtains a large portion of the US debt. Let's say... 20%. They do this in such a manner, through various subsidaries and whatnot, that it is not apparant that they are the holders of this, until they come forward, with documented proof, and demand that the US pay the money, immediately, in cash.

What would happen?

The government would refuse and would continue paying the debt as specified in the repayment terms.