What if...?

A friend asks, "What if the president decided things had gotten out of hand, and politely (and convincingly) asked both corporate and public America to forgive the government's debt? And we agreed, because we're all patriots and we love freedom?"

Well, that'd be great for the government, because they'd be free of almost $8 billion in debt - more importantly, they wouldn't have to pay interest on that loan anymore. But it would be awful for the US public and government agencies that hold the debt. They would lose their initial investment, but also they would lose all that interest that they had annually been accruing.

In many ways, one can think of the national debt as a means by which to redistribute wealth. Wealth is taken from new bond purchasers, and given to old bond purchasers. It's likely that people that accept yields on old bonds will just use the money to buy new bonds, so the system is cyclical. Not that the cycle needs to be broken, but the first step in doing that would be to stop selling more bonds.