# American Money and the National Debt **URL:** \ **Category:** Factual Questions\ **Created:** [July 30, 2009, 4:00am UTC](https://boards.straightdope.com/t/american-money-and-the-national-debt/504750 "2009-07-30T04:00:26Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![Counselor1](https://avatars.discourse-cdn.com/v4/letter/c/cab0a1/32.png) [@Counselor1](https://boards.straightdope.com/u/Counselor1)\ **Post date:** [July 30, 2009, 4:00am UTC](https://boards.straightdope.com/t/american-money-and-the-national-debt/504750/1 "2009-07-30T04:00:26Z")
Could the Congress, under the Constitution’s grant to it of the power to coin money, create coins of any (including very large denominations) without issuing bonds, bills or notes that require taxpayers to pay not only principal but interest? If so, couldn’t Congress simply create these coins and pay them to holders of Treasuries to pay off the national debt? The Treasury would then VOID the bonds. The Treasury department has once in a while redeemed Treasury bonds early. Wouldn’t America be better off if our foreign creditors like China and Japan were stuck with our currency rather than interest paying bonds? After all they aren’t going to come here and buy our consumer goods. Should we care if they buy AIG, Citi, etc. that speculate, reward executives only, harm their own stockholders and don’t comply with the request that they lend to start recovery? ---
**Author:** ![threemae](https://avatars.discourse-cdn.com/v4/letter/t/5f9b8f/32.png) [@threemae](https://boards.straightdope.com/u/threemae)\ **Post date:** [July 30, 2009, 4:12am UTC](https://boards.straightdope.com/t/american-money-and-the-national-debt/504750/2 "2009-07-30T04:12:39Z")
Hey, that sounds like a plan that’s working out well for Zimbabwe… In all seriousness, simply defaulting on our debt in a straightforward fashion would likely prove less disastrous to the American and world economy as well as our future ability to lend money in overseas markets. ---
**Author:** ![IAmNotSpartacus](https://avatars.discourse-cdn.com/v4/letter/i/cc9497/32.png) [@IAmNotSpartacus](https://boards.straightdope.com/u/IAmNotSpartacus)\ **Post date:** [July 30, 2009, 4:14am UTC](https://boards.straightdope.com/t/american-money-and-the-national-debt/504750/3 "2009-07-30T04:14:22Z")
[The Master Speaketh](http://www.straightdope.com/columns/read/1214/who-owns-the-federal-reserve) ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [July 30, 2009, 11:03am UTC](https://boards.straightdope.com/t/american-money-and-the-national-debt/504750/4 "2009-07-30T11:03:17Z")
I believe that the largest portion of the national debt is held by Americans. ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [July 30, 2009, 11:45am UTC](https://boards.straightdope.com/t/american-money-and-the-national-debt/504750/5 "2009-07-30T11:45:01Z")
> [@Tom\_Tildrum](#): > > I believe that the largest portion of the national debt is held by Americans. Technically, the biggest debt-holder is [the US government itself](http://en.wikipedia.org/wiki/File:Estimated_ownership_of_US_Treasury_securities_by_category_0608.jpg), including Fed holdings in that calculation. Foreign governments are in second. > [@Counselor1](#): > > Could the Congress, under the Constitution’s grant to it of the power to coin money, create coins of any (including very large denominations) without issuing bonds, bills or notes that require taxpayers to pay not only principal but interest? Yes. They’d have to undo the Federal Reserve System, but an act of Congress made the Fed, and an act of Congress could unmake it. > [@Counselor1](#): > > If so, couldn’t Congress simply create these coins and pay them to holders of Treasuries to pay off the national debt? The Treasury would then VOID the bonds. The Treasury department has once in a while redeemed Treasury bonds early. Yes, this is also possible. > [@Counselor1](#): > > Wouldn’t America be better off if our foreign creditors like China and Japan were stuck with our currency rather than interest paying bonds? Jesus fuck, no. The world economy is not a zero sum game, alright? We do not magically become richer if we print a bunch of worthless paper to pay off our debt obligations. We become richer by working together, and a big part of working together is _keeping our damn promises_. When they lent us a bunch of dollars, the dollar was valuable. When we pay off the money lent to us, we need to pay them back with dollars of roughly equal value. If we paid them back with cheapo dollars hot off the printing presses, it would crash our currency, our trade relationships, our economy, the world economy, and possibly also civilization as we know it. This is known in the economics profession as “A Bad Idea”. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [July 30, 2009, 4:06pm UTC](https://boards.straightdope.com/t/american-money-and-the-national-debt/504750/6 "2009-07-30T16:06:22Z")
How is your proposal different than, say, printing a billion dollars worth of currency for every man, woman, and child in America, and BAM! Everyone’s rich! ? ---
**Author:** ![IAmNotSpartacus](https://avatars.discourse-cdn.com/v4/letter/i/cc9497/32.png) [@IAmNotSpartacus](https://boards.straightdope.com/u/IAmNotSpartacus)\ **Post date:** [July 30, 2009, 5:08pm UTC](https://boards.straightdope.com/t/american-money-and-the-national-debt/504750/7 "2009-07-30T17:08:15Z")
> [@jtgain](#): > > How is your proposal different than, say, printing a billion dollars worth of currency for every man, woman, and child in America, and BAM! Everyone’s rich! ? Printing all that money would have zero impact. Putting it into circulation would cause a monkeyscrew.