Originally Posted by Botnst
Collecting the debt could pose difficulties.
You keep putting this post out as if China sends us bills monthly and we decide to pay or not. You obviously know that is not the case.
Payment of debt is BY LAW required to be first out monthly. That means Social Security Checks, Medicare Payments and Treasury dividends. They are, for the most part electronically deposited in accounts of the certificate holder. When the Bond or Note expires, the holder has the option of AUTOMATIC Renewal [no debt collection there]. If the person, institution or country does not renew, Treasury deposits the cash into the account of the holder and sets out to sell a new Bond or Note to pay for it. That occurs the last week of the month.
So, if China decides to liquidate some of the 13% of the National Debt that they own, all they will do is get a cash deposit in their account and Treasury will issue new Bonds or Notes to offset the payout. If there are not enough buyers at the current interest rate, Treasury will just raise the interest rate until buyers show up. Tada.
So we don't have a guy living in a doublewide that will be hanging up the phone on China when they call to get their money. As a nation of laws, and a nation of credit, we are obligated to pay our bills and will borrow as much money as necessary to do so. Just another reason jacking the National Debt is such a problem.