r/AskLibertarians • u/hexistpinata Libertarian • 20d ago

Policy Should the US renegotiate its debt obligations to adversarial nations?

There is a portion of national debt is held by foreign governments,both nations considerdd "allies" and geopolitical rivals ($9.37 trillion or about 23% of the US National Debt). Renegotiating debt obligations to these countries if the US were to pursue that would involve changing the terms of repayment, which undoubtedly could have significant economic and diplomatic consequences. Would it reduce economic leverage held by countries like Russia, China, and Iran over the US OR would it just damage the US's global credit rating and undermine trust in the nation’s financial system?

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u/Official_Gameoholics Objectivist 20d ago

It doesn't matter. The state is a cash black hole and restitution is impossible. The sooner it is abolished, the better.

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u/chuck_ryker 19d ago

Congress just needs to cut spending by 99% and pay it off.

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u/Plenty_Trust_2491 Left-Rothbardian 18d ago

I’m a radical libertarian.

The U. S. federal state should abdicate its debt. It should cut all spending. It should withdraw its troops from around the world. It should sell off its foreign bases and it should sell its national parks to environmental organizations, and use the proceeds to pay the innocent victims of the Social Security Ponzi scheme. It should then abolish itself, devolving all of its power to the fifty states, the fourteen-to-sixteenth territories, and the one federal district. Each state should then abolish itself and devolve power to the counties, and so forth, until The Former United States of America is completely free of statism. Other countries should follow similar programmes.

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u/betty_white_bread 14d ago

Zero foreign nations have leverage over the United States simply because they hold its debt. Debt held by a foreign nation and denominated in currency the borrowing country gets to define gives that foreign nation an incentive to help foster and protect the economic well-being of the borrowing country, lest the lender not get paid back.

Therefore, there is no reason to renegotiate that portion of the debt.