GOP Senator Suggests Disastrous Default On US Debt To China
Sen. Marsha Blackburn (R-TN) suggested on Thursday that the United States should consider defaulting on its debt to China as punishment for the COVID-19 pandemic.
In a Fox Business interview, host Stuart Varney said that she had suggested that the United States "not repay them the trillion dollars that we owe them." That, he said, would be "abrogating America's debt."
He added, "We've never done that before."
Blackburn responded by saying many Tennesseans are out of work and the pandemic has cost the U.S. economy trillions of dollars. She blamed China for the situation: "What China has done is a tremendous cost. Should we consider doing this? Yes, indeed," she said. "It is something we should explore as to how to hold them accountable.
Defaulting on the national debt would have serious and far-reaching consequences. The United States' credit rating is based on its record of reliably making payments on its debt. A lowered credit rating would likely mean higher interest rates for future borrowing.
Experts say the fallout from a debt default would include decimated global markets, frozen banking operations, the weakening of the value of the dollar, and the destruction of Americans' investments.
"The devastation to the United States would be so severe that it would take decades to recover from the Depression caused by a default and the attendant dumping of trillions of dollars of U.S. Treasury securities on the global financial markets," analyst Dick Bove of Rafferty Capital Markets wrote in a report to clients.
The suggestion is the latest in a series of anti-China Blackburn has made.
On April 8, she tweeted that China should voluntarily "waive our debt" because of the coronavirus.
On April 20, she and Sen. Martha McSally (R-AZ) introduced a bill that would let Americans sue China for the costs of the pandemic — a proposal National Review contributing editor Andrew C. McCarthy slammed as "well-intentioned" but "foolish."
On Tuesday, she suggested in a radio interview that perhaps the U.S. could withhold interest payments on its debt to China.
Her rhetoric comes right out of her party's playbook, literally. Earlier this month, the National Republican Senatorial Committee — the campaign arm of the Senate Republican caucus — distributed a 57-page memo urging candidates to simply blame China for COVID-19 and its financial impact.
"Don't defend Trump, other than the China Travel Ban — attack China," it urged.
Other Senate Republicans have been using an anti-China approach for weeks.
Sen. John Cornyn (R-TX) last month blamed China's "cultural practices" for the coronavirus's spread. "People eat bats and snakes and dogs and things like that. These viruses are transmitted from the animal to the people, and that's why China has been the source of a lot of these viruses," he charged, without evidence.
Sen. Tom Cotton (R-AR) pushed debunked conspiracy theories about the origins of the virus in China and suggested recently that Chinese students in the U.S. should be barred from studying sciences and math.
Sen. Lindsey Graham (R-SC) said earlier this month, "If it were up to me, the whole world should send China the bill for the pandemic."
The comments come as Donald Trump is also apparently mulling how to use the strategy. The Washington Post reported on Thursday that his administration is exploring "proposals for punishing or demanding financial compensation from China for its handling of the coronavirus pandemic."
"Punishing China is definitely where the president's head is at right now," a senior Trump adviser told the paper.
Throughout January, February, and March, Trump repeatedly praised China for its handling of the coronavirus, saying, "The United States greatly appreciates their efforts and transparency. It will all work out well. In particular, on behalf of the American People."
Published with permission of The American Independent Foundation.