Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

Agnosticsherbet

(11,619 posts)
Tue May 10, 2016, 03:02 PM May 2016

Who would be hurt most by Trumps defaulting on the US Debt? Social Security.

Thanks to factcheck.org, Trumps plan to renegotiate our debt (AKA Defaulting on our national debt) will fall heaviest on the Social Security Trust Fund. Social Security owns the single largest chunk of US debt. The whole federal government owns a whopping 41% of US debt. Of that, the elderly and those who rely on social security would take the biggest hit.

Who Holds Our Debt?
Q: Who are the holders of U.S. debt?
A: The biggest are the Social Security trust funds (16 percent), the Federal Reserve banks (12 percent), China (8 percent), Japan (7 percent) and mutual funds including money-market funds (6 percent).

FULL QUESTION
I keep hearing about the debt ceiling and the U.S. borrowing more. Who are the holders of U.S. debt? Meaning who, exactly does a country of our size borrow money from? Thanks.
FULL ANSWER
Our primary source is Table OFS-2 in the September issue of the Treasury Bulletin, which can be found under the heading “Ownership of Federal Securities.” For additional details, we’ve also drawn on reports of the Federal Reserve System and other U.S. Treasury documents.
As of the end of March 2013 — the most recent period for which the Bulletin provides a breakdown — total federal debt stood at $16.8 trillion. It has since grown to nearly $17.2 trillion, but the share of debt held by various lenders cannot have shifted by much.


This does not address the severe problems that the world economy would suffer.
5 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies

Agnosticsherbet

(11,619 posts)
2. I note that there would be far reaching effects. But Social Security would be hit the hardest.
Tue May 10, 2016, 03:11 PM
May 2016

There is no literal cash in the Trust Fund. Overnight it would become worthless.
A worldwide recession/depression would follow.

 

Hoyt

(54,770 posts)
3. Wasn't disagreeing with you. In fact, Trust Fund would become worthless, and those working -- who
Tue May 10, 2016, 03:18 PM
May 2016

are in essence paying SS benefits for the retired now -- would make a lot less, such that less current money is going into the system. All that would feed on itself and we'd all be screwed. Well, except for folks living in the hills waiting for civilization to destruct, so that they can take over. Not that I am against a rearrangement of priorities, I'd just like it to be more orderly so that the militia types don't gain control.

sorefeet

(1,241 posts)
4. I thought that Social Security was a thingy
Tue May 10, 2016, 03:22 PM
May 2016

all by itself and had nothing to do with our dept. I thought it was solvent for so many more years plus it always would be if we removed the cap on it???? Or did the thieves take it all already.

Agnosticsherbet

(11,619 posts)
5. The money does not set in a pillow case. It is loaned to the US government.
Tue May 10, 2016, 04:04 PM
May 2016

As long as it is US policy to repay our debts dollar for dollar, it works. Trumps plan to default on our debt and renegotiate the payment, it blows a hole in it.

The most interesting thing I found in our debt is that the US Government owns the largest chunk of our debt.

Latest Discussions»General Discussion»Who would be hurt most by...