Let me start with the conclusion: The United States has the ability to repay the money, but there is no need to do so.

Why is there no need to pay it back?

Because U.S. debt is actually a piece of paper, the annual interest on a 30-year long-term bond is only two or three points.

In other words, you only need to pay less than 3% interest every year, and the principal will be repaid after 30 years.

In fact, the role of U.S. debt is to import goods and export U.S. dollars, resulting in huge deficits. Using bonds to recover the U.S. dollars can prevent the U.S. dollars from quickly returning to the U.S. market and quickly pushing up the inflation rate.

If you think about it, this 28 trillion U.S. dollars of national debt is equivalent to the U.S. government importing 28 trillion U.S. dollars of assets on IOU to serve the U.S. government and people.

There are cheap consumer goods, high-tech equipment, US military assets, important resource assets acquired from various countries, and talents from various countries.

Just by issuing bonds, the world can serve the United States, and the world will have to bear the shrinking wealth caused by the continuous depreciation of the U.S. dollar. This is equivalent to the world borrowing 28 trillion U.S. dollars of assets to the United States for free.

for example.

It's like if I borrow 10 million from you, I can get a long-term loan of 30 years with an annual interest rate of 3% without any collateral.

In China, if you borrow money from a bank, if you can get a 30-year long-term loan of less than 5% without collateral, you are considered a great person.

Then, I will use the money I borrowed from you to buy all your house, land, food, and machinery and equipment. I will use the money to hire a bunch of bodyguards, hire you to work for me, and start up the assembly line.

I will be the boss, open a factory, and run a farm, and you will be my wage earner.

You use your meager salary to buy industrial products and food from me.

You have to pay me protection money, firstly because you are afraid that I will instruct the bodyguards to beat you up, and secondly because you are afraid that other gangsters will beat you up.

I usually have nothing to do. I drive a luxury car, live in a villa, and direct my bodyguards everywhere to fix those who dare to say bad things about me behind my back. I am the most handsome guy on this street!

If you want me to pay you back, you have to ask my bodyguard first.

Of course, I am relatively honest.

I said I would pay it back, and you burst into tears of gratitude.

I am honest, not because of my conscience, but because I want to borrow more money.

Do you think I will sell my villa, factory and farm, fire my bodyguards, save costs and pay back the money?

Only a fool would do this!

Why should I pay back the money I borrowed based on my ability to you people?

The annual interest on your 30-year loan is less than 300,000 yuan.

I issued another 30-year bond with an annual interest rate of 3% and borrowed 10 million.

Next door to your house is a nouveau riche who made a fortune from demolition. The annual interest rate on his money deposited in the bank is only 1%, and it is not insured. The bank may go bankrupt at any time.

He saw the strength of my family (we have factories, farms, bodyguards, villas, and luxury cars) and thought I could afford it, and the interest rate was twice that of the bank.

Moreover, my credit used to be very good and I paid my bills on time.

He was happy to lend me money.

I will give you 300,000 out of the 10 million I borrowed from your neighbor.

With the remaining 9.7 million, I opened factories, ran farms, hired bodyguards, bought villas and luxury cars... You may say that with so much debt, I will pay it off one day.

If you ask me, the United States can never pay it back.

The first way is to issue new debt to repay old debt.

Take the example I gave.

The second way is to issue a large amount of U.S. dollars to rapidly depreciate the U.S. dollar.

For example, the question asked about issuing banknotes to pay off debts.

In fact, during the epidemic, the U.S. government did exactly this.

During the epidemic, the U.S. manufacturing industry almost came to a standstill, but the GDP only dropped by a few percentage points. The reason is that the Federal Reserve issued trillions of dollars more to the U.S. government to provide benefits, tax cuts, and subsidies.

These dollars will flow into the capital accounts of various countries in a deficit manner.

The worst outcome for the United States is that an economy stronger than the United States appears in the world and the currency it issues is more reputable. Then, no one will want the U.S. dollar and U.S. debt will be cashed.

If U.S. bonds are issued again, no one will buy them. The Federal Reserve can only issue banknotes to buy them. The U.S. dollars can only circulate in their own homes, significantly pushing up U.S. prices and causing violent inflation.

Think about it, if all 28 trillion U.S. dollars were returned to the U.S. market to buy assets (patents, oil mines, ports, airports, railways, semiconductor factories, high-tech equipment, weapons, agricultural products), the scale of the U.S. manufacturing industry would be only one-tenth of GDP.

First, how can it support such a large-scale dollar currency return?

It will inevitably cause prices to skyrocket, and the United States will be miserable and lose its hematopoietic ability.

In addition, the U.S. dollar cannot continue to be exported in the form of a deficit. Americans must produce cheap consumer goods themselves. How can they compete with China?

It will inevitably lead to massive unemployment.

This is also the fundamental reason why the United States is desperately trying to suppress China.

Because in the foreseeable future, China will be the country that challenges the financial hegemony of the United States in all aspects.