By forgive, I mean the Fed should just forgive the US Treasury. So no one other than the Fed is missign money owed.
Nice dream, if it worked that way every central bank and government in the world would do it. It would instantaneously destroy the currency and would make imported products unaffordable for all citizens of that country. It would also prevent every lender to not ever lend to that nation again. Such thoughts can only originate from people who have never experienced inflationary cycles. What would you call a Chinese or HK person who stubbornly insists that property prices can only go up? You would rightly call such person a fool. Just because one has never gone through inflationary cycles and has not studied history does not mean such facts do not exist. Food for thought...
Not saying every country, but I think nothing bad will happen to the US if we just have the Fed cancel a few trillion.
Really? What do you think the Chinese and Japanese will think of that plan, given Americans borrowed from them?
I bet everyone here owns a stock that has done a stock buyback. Either directly or through a 401k that invests in the S&P500. So the Fed cancelling Treasuries is basically a bond buyback. Is it really that crazy? If so, why are you still holding companies that have done a stock buyback?
They might think that they have a higher priority claim on an asset base that hasn't changed. Fewer shares, but nothing else changed.
What happens to the people, programs, profits, and operations that are dependent on and affected by the INTEREST that is paid on those "few trillion"? Socialists in the US are currently floating the idea of student loan cancellation. Where did/does the money come from in the first place? And going forward, where from? btw, Clinton made the law that student loan debt is not dismiss-able through bankruptcy. Think it through... you haven't.
One person's debt is another person's asset. Someone has lent the money in the first place, if the money is not paid back it will come at the cost of the lender losing their money. The money lent is the money everyone has in bank accounts and pensions, so by defaulting on debt payments bank account funds would be written off and people would lose their pensions.
CORRECTAMUNDO! Canceling debt means "somebody takes it in the shorts". Debt ALWAYS gets accounted for... by somebody.