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If I borrow money as a business the expectation is not only will I generate enough revenue with it to pay the loan back but I'm also going to put money into my own pocket. Loans to business are typically for capital expenses, suppose you are a utility that is going to build a billion dollar power plant that will take 25 years before you see a return on your investment. The bank is going to be paid back over 25 years, you will put money in your pocket for the next 25 years.
I have no clue how soon it will be. They will simply start trading in something other than the dollar with other countries going along.
This is already happening, between Russia and China.
How does Russia or China take over the USD's role as a world reserve without creating a massive amount of new sovereign debt of their own to send out to the rest of the world?
This is already happening, between Russia and China.
How does Russia or China take over the USD's role as a world reserve without creating a massive amount of new sovereign debt of their own to send out to the rest of the world?
People, markets, countries would need to begin stockpiling the yuan and ruble and that's not happening.
Your attitude blaming one part of the other is the problem. It is well documented that the national debt has been generated under multiple presidents and multiple congresses on both sides of the aisle. Yet you blame one side of the aisle. Seriously, deal in fact. Be part of the solution or part of the problem. Blaming one side of the aisle makes you the problem.
The US has been debt free for one year, 1835.
Congress controls the purse strings.
Every Congress inherits debt, adds to it and passes it on.
This is already happening, between Russia and China.
How does Russia or China take over the USD's role as a world reserve without creating a massive amount of new sovereign debt of their own to send out to the rest of the world?
People, markets, countries would need to begin stockpiling the yuan and ruble and that's not happening.
In 10-25 years of time for this to happen, it will take the equivalent of $10T of any new reserve currency sent out into the world. That is in addition to that sovereign county's own money needs.
Much of national debt does the same thing. For instance we build public roads/bridges and for the next 25 years there is then more local commerce, business and travel. That road improves local business and pleasure for the next 25 years.
This is mostly supported by user fees as it should be. I'd agree they don't need to profit however that has it's own issues because there is no reason to do it efficiently when you can just raise the tax. I think this can be better performed by hybrid system similar to utilities where you have private industry given a monopoly with price controls. Monopolies and price controls are not a good thing but it's the only practical way.
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The big difference here is that the Federal Gov't does not need to 'pocket' any money.
They may not need to but they certainly are where automobiles are concerned. Fuel tax (part of which is used to fund mass transit), sales tax on vehicles, license fees, inspection fees, title transfer fees, registration fees, emission testing fees, parking/speeding tickets, toll roads/bridges, excise tax on tires, the vast amount of tax revenue ranging from car washes to automobile manufactures and when you park in a Philadelphia parking authority parking lot half of the cost going to the city and school district.....
When you start adding up all the tax/fee revenue that is directly or indirectly generated by automobiles it's a mountain of cash.
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