The More You Owe Me, The More I Own You.

Does the USA need an overall debt ceiling?  It’s doubtful as the Constitution guarantees the validity of US debt.  What must begin is a debt reduction plan followed by sensible financial management, as ever increasing debt will become unsustainable.

It does need a ceiling specifically for foreign debt.  Excessive debt held by foreign nations can be used by them as leverage to extract favorable deals that hurt US companies and US jobs.  In times of international crisis a large demand for bond redemption could be used as an economic weapon against us.  Let’s check some numbers.  Foreign governments hold more than $4.5 trillion, of which China is the largest holder with $1.2 trillion.  That’s a big stick with which to demand favorable treatment for Chinese companies.

National security and economic well being demand that the US break the big stick.  Establish a foreign debt ceiling of $2 trillion, with no one country allowed to hold more than one-third of it.  Said ceiling would be allowed to increase by not more than 1% per year provided the previous year experienced positive GDP growth.  No increase would be permitted for zero or negative growth.  Decreases would always be welcome.


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