If the US printed $37 trillion in one go and paid off all its debts, what would happen? Once the US did this, it would be kicked out of the international community by China, Russia, the UK, and France, the four permanent members of the UN Security Council, the very next day. In the end, it would be the American people who suffered the most.
Printing so much money would double the money supply, causing the price index to skyrocket immediately. There are historical examples of this, such as Germany or Zimbabwe in the 20th century. The result of printing money to pay off debts was that a loaf of bread went from one mark to billions of marks. If the US repeated this mistake, the prices of everyday items like milk and gasoline in supermarkets might multiply several times within days. According to data from the Federal Reserve, the inflation rate was already hovering around 3% in the first half of 2025. This situation would push the inflation rate to double digits, or even higher. Meanwhile, people's wages remained unchanged, while pensions and savings lost value. The retirement funds (like 401(k)) that people had saved for decades would lose significant purchasing power. Low-income families would suffer the most, as rent and medical costs would rise, and unemployment rates would also soar, because the cost of borrowing would spike, squeezing profit margins and forcing companies to lay off workers and cut production. Imagine the factory workers in the Midwest who relied on manufacturing for their livelihoods; now they would lose orders and their production lines would shut down, leaving unemployment benefits insufficient to buy groceries for a week.
Inflation expectations would cause interest rates to surge, jumping from over 5% to 15% or even higher. The bond market on Wall Street would crash directly, and the stock market would follow suit. The US stock market was already volatile in 2025 due to interest rate fluctuations. This situation would cause the S&P 500 index to fall by half, with pension funds and mutual funds suffering massive losses. The independence of the Federal Reserve would also come under question. Previously, it could rely on its credibility to stabilize the market, but once the US resorted to printing money to pay off debts, investors would rush to sell, and who would dare to buy US Treasury bonds? Economists have long warned that monetizing debt is not a viable path. It may provide short-term relief, but it leads to long-term harm. According to a budget model from Brown University, the US debt-to-GDP ratio has already exceeded 120%. If the US continues this approach, economic growth over the next decade would be cut in half, plunging the country into a stagflation trap—rising prices, stagnant growth, and high unemployment.
Internationally, the consequences would escalate faster. China holds about $780 billion in US Treasuries, according to data from February 2025, which was $784.3 billion. Although it reduced its holdings somewhat by the second half of the year, it still held the majority. Countries in old Europe, such as the UK and France, had large amounts of dollar assets in their pension funds and sovereign wealth funds. The UK had even led the way in increasing its holdings of US Treasuries in the first half of 2025, while France held over $330 billion. Russia, although its assets were frozen due to sanctions, held relatively few treasuries, but its energy exports depended on dollar settlements, so it would also be affected. The four permanent members of the UN Security Council, holding real losses, would definitely retaliate if the US did this. It's not just talk; historically, creditor countries have never been lenient toward debt defaults. Selling US Treasuries is just the beginning. With foreign holdings of US Treasuries exceeding $8 trillion, such a sale would cause the dollar exchange rate to collapse, dropping from 1 to 7 yuan to 1 to 10 yuan or more. Central banks worldwide would respond accordingly. Japan and Saudi Arabia, major players, had already been reducing their dollar reserves, shifting toward gold and euros.
The move to de-dollarize was gaining momentum in 2025 among BRICS countries. Brazil, as the rotating chair, invited Mexico, Uruguay, and Colombia to attend the summit, expanding the membership to ten countries, including newly joined Indonesia. Their payment systems, from planning to pilot testing, were just one step away. By mid-2025, they had already tested cross-border transfers, replacing US dollar settlements with local currencies. Saudi Arabia's oil trade, which had already experimented with the renminbi, now fully switched to it. The pricing method for commodities like iron ore and oil changed, significantly increasing import costs for importing countries, making US exports less competitive. Loans from the New Development Bank avoided the dollar, and now accelerated projects along the Belt and Road Initiative. The share of RMB in internationalization rose from 2% in 2020 to 8% in 2025. Losing the dollar hegemony means losing the global "harvester." Previously, the US could buy cheap goods from around the world by printing money, but now it would face the opposite: imported goods becoming unaffordable, exacerbating inflation.
Militarily and in international affairs, things could get serious. The US military budget accounts for half of the global total, relying on dollar financing. If its credit collapsed, the alliance system would also shake. NATO allies like the UK and France, which had deep dependence on US debt, would have to reassess, shifting defense spending to domestic resources. Russia and China had already promoted local currency trade in Eurasia. In 2025, gas pipeline settlements in the region were fully conducted in rubles and RMB, and Middle Eastern oil followed suit. The UN Security Council's joint action of kicking the US out of the "international community" is not exaggerated—it could trigger financial sanctions, freezing the US's voting rights at the IMF, or pushing for WTO reforms to limit US trade privileges. At the 2025 G20 Summit, which had already discussed debt restructuring, this incident would directly shift the focus to isolating the US. The result? The US would become an isolated island, its international status declining, and its influence shrinking to that of a second-rate power.
Ordinary people would be the true victims. If the dollar collapsed, supermarket shelves would be half-empty, and imported fruits and electronic products would be too expensive to afford. Domestic manufacturing couldn't keep up, causing prices to soar. According to 2025 CPI projections, if the money supply surged, food inflation could exceed 20%, and gasoline could reach $10 per gallon. Mortgage and car loan interest rates for the middle class would spike, leading to record-high default rates, with banks facing mountains of bad debt. For the poor, it's even worse—community clinics would close, school budgets would be cut, and children's education would become an issue.
In summary, the idea of printing money to pay off debts may seem satisfying on the surface, but it's actually self-destructive. Ordinary people would suffer, the international community would fall apart, and the country's strength would diminish. In reality, the US needs to gradually reduce deficits and control spending. Otherwise, this kind of situation will eventually happen, and there won't be any place to buy a后悔药 (regret medicine) when it does.
Original article: www.toutiao.com/article/1848553799424064/
Disclaimer: This article represents the views of the author.