Is Trump's idea about renegotiating the national debt unconstitional?

a reply to: Profusion

I am no more inclined to post a specific example of things working the way I understand them to work, than you are to post a specific and exactly relevant example of them working differently than that!

However, I would put it to you that it is not at all impossible to imagine a situation where a company or entity owed money by a state, might agree to take a lump sum of less than the original total, preferring to have a big hit of money all at once, than a slow trickle over time.

Campaign platform promises, meh. Reagan was gong to abolish the Federal Reserve, lol. Obama was going to leave Afghanistan, lulz.

Trump is going to balance the budget? Before or after he builds "The Wall" and wipes out ISIS?

originally posted by: NewzNose
a reply to: Profusion

The National Debt belongs to the corporation UNITED STATES OF AMERICA, INC. Which has responsibility for it since our country incorporated in 1871. People are not owned by any corp. and tgerefore, do not owe any portion of the National Debt. The 10 square miles that makes up Washington DC are sole owners of that debt.

This is why there would never be any renegotiation of the debt of the United States. A corporation's credit rating is its lifeline in many ways.

Clint Eastwood says in ad that U.S. borrows $4B day, much 'from China’

Does anyone seriously think that the leadership of the US government would actually dream of renegotiating their debt...

...allowing their credit rating to slip...

...which could put their entire operation at risk?

It simply could never happen.

originally posted by: TrueBrit
a reply to: Profusion

I am no more inclined to post a specific example of things working the way I understand them to work, than you are to post a specific and exactly relevant example of them working differently than that!

All I've got is the entire history of the United States and a guarantee written into the Constitution.

“But what if you put yourself in a corporate form?” Justice Thomas asked, suggesting that the answer must be the same.

Asked about his attitude toward the two decisions overruled in Citizens United, he said, “If it’s wrong, the ultimate precedent is the Constitution.”
www.lonelyconservative.com...

“...the ultimate precedent is the Constitution.” - Justice Clarence Thomas

originally posted by: AugustusMasonicus
a reply to: Profusion

The debt needs to be repaid, however if the creditors agree to lower the debt that is their prerogative. Unilaterally lowering the legal debt is not permitted but if your creditors agree than

what is the issue?

Why?

We have the best military in history..

If you loan Tony Soprano money, he only pays you back if he feels like it...

China isn't an ally...

They gave use functional goods and services for little pieces of paper.... Little pieces of paper that are not backed by anything...we should keep trading them for as many actual materials we can get.

We will never pay them back or give them, say Hawaii, period.

Their bad.....

a reply to: JoshuaCox

Huh? China does not buy United States debt instruments in return for selling us merchandise, the Treasury Bills they purchase are redeemable in the future with interest.

This is an interesting article from just a couple weeks ago about the national debt:

Who Owns the U.S. National Debt?

The Biggest Owner Is You!

Debt Held by the Public - Foreign governments and investors hold nearly half of the nation's public debt. One-fourth is held by other governmental entities, like the Federal Reserve, and state and local governments. Fifteen percent is held by mutual funds, private pension funds, savings bonds or individual Treasury notes. The rest is owned by businesses, like banks and insurance companies, and an assortment of trusts, companies, and investors. Here's the breakout:
--Foreign - $6.175 trillion
--Federal Reserve - $2.461 trillion
--Mutual Funds - $1.056 trillion
--State and Local Government, including their pension funds - $803 billion
--Private Pension Funds - $403 billion
--Banks - $515 billion
--Insurance Companies - $293 billion
--U.S. Savings Bonds - $174 billion
--Other (individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts and estates, corporate and non-corporate businesses, and other investors) - $1.198 trillion. (Sources: Federal Reserve, Factors Affecting Reserve Balance, April 6, 2016. Treasury Bulletin, Ownership of Federal Securities, Table OFS-2, as of June 2015)

I'd need more details about Trump's plan before I can form an opinion on the OP question.

originally posted by: AugustusMasonicus
a reply to: JoshuaCox

Huh? China does not buy United States debt instruments in return for selling us merchandise, the Treasury Bills they purchase are redeemable in the future with interest.

But in the end it is still just a pieces of paper we only honor if we feel like it...


So what are we trading for then? Money, that we spend on goods and services.

originally posted by: JoshuaCox
But in the end it is still just a pieces of paper we only honor if we feel like it...

You can look at it that way or you can see that not honoring Treasury Bills sold to foreign nations would only devalue the Treasury Bills we own as citizens since we are the largest holders of our own debt.

originally posted by: AugustusMasonicus
a reply to: JoshuaCox

Huh? China does not buy United States debt instruments in return for selling us merchandise, the Treasury Bills they purchase are redeemable in the future with interest.

Well indirectly they do. Foreign entities buy US Debt with US dollars that they have earned by selling goods and services to the US. As the US is running a trade deficit there will be an accumulation of dollars overseas. There is no point in holding these when they can earn interest on the same amount by buying US debt.

originally posted by: ScepticScot
Well indirectly they do.

That is not what the other poster was implying.

originally posted by: AugustusMasonicus

originally posted by: ScepticScot
Well indirectly they do.

That is not what the other poster was implying.

Well the other poster was wrong but not about that part. Essentially the US has traded real goods and services for bits of paper (or more accurately numbers on a server somewhere), there is no real difference between dollars held overseas and debt held overseas other than one pays interest.

Asked whether the United States needed to pay its debts in full, or whether he could negotiate a partial repayment, Mr. Trump told the cable network CNBC, “I would borrow, knowing that if the economy crashed, you could make a deal.”

Seems a bit odd to me, borrowing money to pay off a debt. You'll be in more debt, right? I mean, it's like putting out a house fire with gasoline. Oh well. Maybe I'm just dumb or something.

originally posted by: AugustusMasonicus

originally posted by: JoshuaCox
But in the end it is still just a pieces of paper we only honor if we feel like it...

You can look at it that way or you can see that not honoring Treasury Bills sold to foreign nations would only devalue the Treasury Bills we own as citizens since we are the largest holders of our own debt.

I'm with you...when things are good....

But that's not really what we are discussing is it?

We are discussing a BAD situation...

If we went to war with China, do we pay our debts? Nope

If China decided " screw you...we are calling in all of our debts!" Do we financially bankrupt ourselves to pay it or give them Alaska as payment?? Nope

We tell them to kick rocks and "come at me bro."

originally posted by: ScepticScot
...there is no real difference between dollars held overseas and debt held overseas other than one pays interest.

There is a huge difference, dollars held solely as currency are removed from the economy.

originally posted by: JoshuaCox
If we went to war with China, do we pay our debts? Nope

At first, most likely not. After? It would still be difficult to entirely eliminate them and as war is not exactly in the offing, this a rather unlikely scenario.

If China decided " screw you...we are calling in all of our debts!" Do we financially bankrupt ourselves to pay it or give them Alaska as payment?? Nope

China cannot 'call in their debts'. The Treasury Bonds, as debt instruments, have a clearly outlined timeframe as to when they reach maturity. They would lose money if they tried to redeem them early.

originally posted by: AugustusMasonicus

originally posted by: ScepticScot
...there is no real difference between dollars held overseas and debt held overseas other than one pays interest.

There is a huge difference, dollars held solely as currency are removed from the economy.

Not sure I follow. Dollars held outside the US will one day be spent in the US exact same way as debt held outside the US will one day be redeemed and spent in the US.

originally posted by: ScepticScot
Not sure I follow. Dollars held outside the US will one day be spent in the US exact same way as debt held outside the US will one day be redeemed and spent in the US.

Dollars held as dollars (or any currency held solely as currency) is not an investment, it is removed from the economy. The Chinese (or whoever) that earns profits on goods in dollars and does not reinvest that profit losses out as that money is removed from the economy.

It is like stuffing your mattresses on a large scale. You earn a return of ZERO on that.

a reply to: AugustusMasonicus

Yes but the dollars are still dollars and still reflect potential future spending in the economy the exact same way as the debt does. While there are differences in terms of the affect of the initial creation of the debt (and corresponding spending) with regard it being held overseas either as currency of debt I see little practical difference.

originally posted by: ScepticScot
Yes but the dollars are still dollars and still reflect potential future spending in the economy the exact same way as the debt does.

No, they do not. The debt instruments have a fixed value. Hoarded dollars do not. They could be worth more or less depending on the economy.

So a man who has claimed to use bankruptcy as a tool in his private business, is now trying to use the same tactic for the country, and people are surprised?!