What do you think and the possible effects if the United States defaults on its debts or its credit rating is downgraded?
Biggest lenders to the united states like china and japan have taken steps to reduce US debt they hold for many years.
china did not lend to the US
the US lent to the US (BoA->treasury)
where the BoA held the loan agreements(bonds) and BoA sold those bonds to china, so that BoA can profit more from both sides (treasury interest and china purchasing)
decades ago china wanted these bonds because IF US did default. china then "own the US".. but they are realising that the US is not sticking to a debt ceiling for chinese dream to flourish, US is having a debt canopy(that grows) so china will never see a 'default' thus they are less interested in buying bonds
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side note.
when china had the bonds, the US were finding silly reasons to sanction china so that china paid Us meaning it round-circled the situation where china were not even profiting from the interest of the bonds
..
other things are
when US made an agreement(bond) to get a few trillion in 2008 and 2020, that money BoA created and put into the treasury bank account went straight back out and into commercial banks hands(2008 crisis) and citizens/businesses hands 2020 stimulus) this money now say in commercial banks means the commercial banks holding trillions of bank balance(digitial) needed to ensure they had X% of total balance as bank notes to supply bank tellers(cashier desks and atms) with enough paper to meet daily demands
these commercial banks have to BUY bank notes at face value from the US mint. meaning the treasury then gets paid for creating said money
thus the commercial banks are now slowly paying back the government with the bank not purchasing.. yet when it comes to accounting. the treasury does not take this as paying off the 2008 crisis of commercial banks. and instead treats this as income to the treasury
in short the treasury is getting more budget to spend but not writing off some of the debts.
so the 31trillion "public debt" is artificially being held up high
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next stage the reason is simple
if they clawed back this as debt pay offs. it would shrink the GDP. which is at simplest explanation just a rating system of meaningless numbers now to see which country is "in power"
the US want to remain number 1 so that china doesnt take first place ranking..
even though on all over measures of any real economics. china is #1 ranking of economic superpower.
(china inflated its GDP and debt and money circulation due to covid which is why the US had to further inflate its money supply in 2021-2022)
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the other methods the US is doing to fudge the numbers of GDP of country rankings is simply by adjusting the forex exchange rate between Us/china to make china appear poorer.
even though if you rated countries by real economics. they are not as poor as presented. but becasue everything is measured in USD. it appears as though they are
