What If The US REFUSES To Pay Back CHINA?

Martha C. White writes in an article published by NBC News the following:

THE USA HAS BORROWED $1 TRILLION FROM CHINA

The recent intensification of President Donald Trump’s hard line on China has included a wide-ranging grab bag of policies and proposals that touch on everything from student visas to soybean purchases. But the most explosive might be the suggestion floated by some right-wing lawmakers and commentators that the country could choose to default on some of the nearly $1.1 trillion in U.S. Treasury bonds held by China.

The proposal alarms analysts, who say even entertaining the idea is dangerous in an economic environment characterized by a pandemic-driven recession and a massive increase in the national debt.

Sen. Lindsey Graham, R-S.C., a close Trump ally, said on Fox News, “They should be paying us, not us paying China,” and expressed support for a suggestion from Sen. Marsha Blackburn, R-Tenn., that the U.S. should cancel its sovereign debt held by China.

John Yoo, a law professor at the University of California, Berkeley, and visiting scholar at the American Enterprise Institute, said in an article that the U.S. could “make China pay for COVID-19” by reneging on its commitment to bondholders. “Conceivably, Washington could even cancel Chinese-held treasury debt and us[e] the proceeds to create a trust fund that would compensate Americans harmed by the pandemic,” he wrote.

While Yoo allowed that this would roil financial markets, others say even that acknowledgement vastly understates the scope of economic calamity this would trigger.   TO READ ENTIRE ARTICLE, CLICK HERE...