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The National Debt

 
 
gollum
 
Reply Thu 16 Feb, 2023 04:20 pm
There is a lot of ink being spilled writing about the ever-growing national debt. As a citizen, I am also concerned.

Let's look from the other side. Are the lenders (the holders of U.S. debt) concerned? Do they fear a default?
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Type: Question • Score: 3 • Views: 858 • Replies: 5
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engineer
 
  1  
Reply Fri 17 Feb, 2023 06:56 am
@gollum,
No, they continue to buy US debt for very low rates of return. The first sign investors are worried will be failure of the Treasury to be able to sell bonds at the rate they want. Then they will have to raise the rates to attract more investors. Right now, US debt is considered the one of the safest investments in the world.
gollum
 
  0  
Reply Fri 17 Feb, 2023 06:25 pm
@engineer,
engineer-

Thank you.

It seems strange with all the bad news and with the huge amount of new debt plus rolled-over debt that must be sold each month.

Perhaps some (most?) of the debt is purchased by U.S. government-related entities.
oralloy
 
  -1  
Reply Sat 18 Feb, 2023 02:59 am
@gollum,
Some, yes. I doubt most. (However, I don't actually know.)

At any rate, there are still plenty of eager buyers for the debt that is sold to the public.
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BobBlack
 
  2  
Reply Sat 11 Mar, 2023 04:02 pm
@gollum,
As of September 2021, the U.S. national debt stood at over $28 trillion, and it continues to rise. While the national debt is a concern for citizens and policymakers, the lenders holding U.S. debt, such as foreign governments, central banks, and institutional investors, are generally not overly concerned about a default.
This is because the U.S. government has a long-standing reputation for always paying its debts, even in times of economic turmoil. The U.S. government has a history of always making timely payments and meeting its obligations to its creditors.
Moreover, U.S. Treasury bonds are considered one of the safest and most liquid assets in the world. They are highly sought after by investors seeking stability and security for their investments, which means that the demand for U.S. debt remains strong.
However, this does not mean that lenders are completely unconcerned about the national debt. Some lenders may worry about the long-term sustainability of the U.S. fiscal position and its ability to manage its debt burden over time. They may also be concerned about the impact of rising interest rates on the value of their bond holdings.
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gollum
 
  0  
Reply Sat 20 May, 2023 12:05 pm
@gollum,
If the "Federal Reserve" were to forgive a sufficient amount of Treasury Obligations that it already owns, would that solve the problem?
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