Why can’t a government forgive it’s own internal debt?
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Debt is a social construct. The government is sovereign and can do whatever it wants. In other countries it is commonplace for industries to be nationalized or debts forgiven.
There would, however, be consequences. Most of the world economy is structured around complex debt-based financial agreements and the US has a huge part in that. Pulling the rug out would probably cause an economic collapse and many unanticipated side effects.
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