No, We Shouldn’t Cancel Our Debt With China
These concerns were echoed by economist Jonathan Bydlak, the director of the R Street Institute’s Fiscal and Budget Policy Project.
“The most obvious implication is that the ability of the U.S. to borrow would evaporate overnight,” he said. “Not only would China be unwilling to lend to the U.S., but other major lenders like Japan would likely interpret nonpayment as a risk to them, too.”
“Businesses and individuals would find it much more difficult to borrow, and the market would likely collapse due to the increased uncertainty,” Bydlak warned. “Not to mention, the U.S.’s standing in the world economic system would be forever shattered, since a significant part of our economic might has been built on our economic credibility.”
Image credit: ElenaR
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