Stopping issuance of new Treasury debt, and getting the Fed to just monetize IOUs wouldn’t invalidate existing debt notes (unless the Treasury just “paid them out” with the newly created money.)
No, it would simply destroy the existing “value” of the currency, just as in all cases of debasement in history.
The empire declares a jubilee. The financial world requires the good graces of the empire, and the empire continues to make the case that its continued dominance is necessary for world peace (which is arguably true). The calculus then for world finance cartel is to determine whether future profits under new global management post-empire will exceed future profits with empire minus a major write off of debt.
As to US's credibility, let us recall that credit worthiness is set in the West, and, should the empire continue to exist, those who object to US's AAAsuper+ rating by the financial world can go and trade with North Korea and stop buying US bonds.
The energy trap of Petrodollar is now effectively busted (see progressively more negative press on KSA in US over the years culminating in the recent spat), so empire will need something else to create demand for US dollars for payment. Possibly chips? Food?
Which is why there is a slow simmering world war brewing. Everyone knows where this is going. Something has to give. Either the empire and global order du jour, or, the restructuring demands of emerging powers in the developed world + a sore ex empire.
p.s. btw Polyani's The Great Transformation discusses the role of the financial system and world order and the ambiguous but symbiotic relationship between powers and banking, and world order, right at the introduction.
For every debt there is a matching asset by accounting identity. When the asset is spent it creates a flow of taxation that precisely matches the debt for any positive tax rate.
That's a simple geometric series a 15 year old can do. Get a piece of paper and work it out and you'll see.
This but unironically. The 355 ship navy and 386 squadron air force won't build themselves. All those HIMARS, NASAMS, Stingers, Javelins, and counter battery radars we sent to Ukraine also need to be replenished.
The vast majority of our defense spending is Salaries for US Service Men and Women. And they are under paid in many cases. Just bumping the salary of the bottom ranks would likely shift the spending ratio.
I looked closer, and it seems my memory is either bad or the levels have changed since I last dug into those numbers. In either case, thanks for checking those numbers!
