What Would Happen If the US Printed $38 Trillion to Pay Off All Its Debt?

If the United States were to print $38 trillion all at once to pay off its debts, here’s what would happen: The very next day, China, Russia, the United Kingdom, and France—the four other permanent members of the UN Security Council—would join forces to kick the U.S. out of the international core circle. In the end, it would be the American people who suffer.

If the U.S. really dared to fire up the printing presses and churn out $38 trillion to fill its debt hole in one go, it wouldn’t even need China, Russia, the UK, or France to step in—the country would plunge into an abyss of irreversible ruin long before that. This wouldn’t be paying off debt; it would be a death sentence for dollar hegemony, and the bill would ultimately be paid by ordinary American citizens.

To understand just how absurd this move is, you need to grasp the foundation of dollar hegemony. After World War II, the dollar rose to dominance by being pegged to gold. When the Bretton Woods system collapsed, it became tied to oil, transforming into the "petrodollar." It costs less than a dollar to print a $100 bill, yet other countries have to exchange $100 worth of goods for it. This is essentially the U.S. harvesting the world through its printing presses. But the foundation of this privilege is credit. The moment the U.S. prints money without restraint, that credit collapses instantly.

History has already sounded the alarm bells. Post-WWI Weimar Germany printed money to pay reparations. By 1923, one U.S. dollar was worth 4.2 trillion marks. People needed wheelbarrows full of cash just to buy bread, and eventually, they could only burn banknotes for warmth. After World War II, Hungary went even further, issuing banknotes with 20 zeros, only to see its economy regress to a primitive barter system. No matter how large the U.S. economy is, it cannot escape the iron law that "printing money inevitably leads to inflation."

On the first day of printing, the world would erupt in chaos on the second. Countries like China and Japan, which hold trillions in U.S. debt, would see their foreign exchange reserves instantly turn into worthless paper. They would undoubtedly be the first to dump their remaining dollar assets. Australia is already accepting yuan for iron ore, and Russia is using the yuan for natural gas transactions. The already shaky dollar system would completely fall apart. Even the UK and France, as U.S. allies, would see their financial markets devastated by the flood of dollars. It’s only natural that they would join forces to retaliate.

Even without the four nations taking action, the international core circle would expel the U.S. on its own. If the dollar were to plummet, global trade would switch to alternative settlement currencies. Oil, minerals, and other commodities would undoubtedly abandon the dollar for pricing. As a former U.S. Treasury Secretary once said, "The dollar is our currency, but it’s your problem." Now, that problem would become a catastrophe. Countries have long wanted to break free from the dollar’s grip. Once the dollar loses its reserve currency status, the U.S. would no longer be able to transfer crises by printing money, and its hegemony would be reduced to zero.

The hardest hit would be the American people. Supermarket shelves would be emptied in a rush, with the prices of milk and bread tripling in a single day. Pension accounts would shrink by half, at the very least. The mild inflation of the 1970s already caused widespread public outcry. The hyperinflation triggered by printing $38 trillion would push the middle class into poverty overnight. Bank runs and corporate bankruptcies would follow one after another. With jobs disappearing, there would be no more "good days" to speak of.

Don’t think the U.S. could rely on its military dominance to tough it out. If the economy collapses, military strength alone won’t save it. The Soviet Union was ultimately brought down by its economy. If the U.S. were to commit monetary suicide, it would have to print even more money to fund its military, trapping itself in a vicious cycle of "inflation → printing money → even more inflation." China, Russia, the UK, and France wouldn’t even need to resort to force. Simply advancing local currency settlements among themselves would be enough to deal a heavy blow to the U.S.

In the end, dollar hegemony is the lifeblood of the United States. Printing money to pay off debt would be like severing its own arteries. Countries are already quietly dumping U.S. debt and promoting de-dollarization. If the U.S. were to take this reckless step, it would be pulling itself down from its global leadership position with its own hands. The debt might be cleared, but the nation’s credit would be destroyed, and its people’s livelihoods ruined. This would be a deal so disastrous that even "losing big" would be an understatement.