Bill Overview
Title: National Debt is National Security Act
Description: This bill establishes limits on the amount of public debt that may be held by foreign governments, entities, and individuals. The bill allows the President to waive the limits if the President determines and reports to Congress that an important national interest requires the waiver.
Sponsors: Sen. Ernst, Joni [R-IA]
Target Audience
Population: People globally in countries holding US debt
Estimated Size: 332000000
- The global economy is interconnected, and foreign investors hold a significant portion of US debt.
- Restricting the amount of debt foreign governments and individuals can hold may affect their investment strategies and economic planning.
- Such limitations can also influence the interest rates and terms under which the US can issue new debt.
- Countries with large holdings of US debt, like China and Japan, may be affected as they need to adjust their portfolios.
- Changes in foreign debt holdings can affect exchange rates, potentially impacting global trade.
Reasoning
- The policy aims to limit foreign holdings of US debt, which may alter foreign investment in the US economy. The focus of the interview sample is to cover a broad range of individuals who might be uniquely impacted by these changes, especially those working in finance, exporting industries, and those dependent on credit markets.
- A budget limited to $500,000,000 USD in the first year implies targeted allocations rather than blanket financial assistance, affecting the degree of impact felt by individuals.
- While the initial effect of the policy may mainly impact financial sectors, longer-term shifts could influence broader economic conditions, such as interest rates and inflation, indirectly impacting a wider population.
Simulated Interviews
Investment Banker (New York, NY)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- The policy could lead to reduced foreign investments, impacting my job directly.
- Limiting foreign capital might bolster national security, but it also slows down market liquidity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 6 | 8 |
| Year 20 | 7 | 9 |
Retiree (Miami, FL)
Age: 55 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- There's concern about how the policy might affect the stability of my investments.
- Higher interest rates could be both good and bad for savings bonds, depending on inflation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Small Business Owner (Houston, TX)
Age: 34 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 5/20
Statement of Opinion:
- Financing my business might get expensive if interest rates rise.
- I need to watch how this policy affects my supply chain from overseas.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 7 |
Software Engineer (Chicago, IL)
Age: 28 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- I doubt this will cut into my job security, but my stock options could be affected.
- I'm primarily worried about the tech industry facing higher capital costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
College Professor (Seattle, WA)
Age: 48 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- This policy could be a rich topic for my research; however, rising tuition costs due to fiscal changes are a concern.
- I'm wary of public education funding adjustments as a knock-on effect of the policy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 7 | 8 |
Farmer (Phoenix, AZ)
Age: 63 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 7/20
Statement of Opinion:
- Higher rates could increase production costs if not raised tariffs affect my exports.
- It's crucial for me to monitor how international markets react to the U.S. debt changes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 5 |
| Year 3 | 4 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 7 | 6 |
Graduate Student (Los Angeles, CA)
Age: 22 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- My student loans' interest could be impacted.
- I hope the policy provides case studies for future economic theories.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
CEO of a Tech Startup (Boston, MA)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Foreign investors play a huge role in our company’s capital; if limited, we must explore new avenues.
- Costs associated with debt financing might rise, impacting growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 6 | 9 |
| Year 3 | 7 | 9 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 8 |
Government Employee (San Francisco, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- This could drastically change my day-to-day operations.
- Managing changing fiscal paradigms will be challenging but engaging.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 6 | 8 |
| Year 5 | 5 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 7 | 9 |
Car Factory Worker (Detroit, MI)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- If this changes consumer spending due to higher interest rates, it could affect my job security.
- There's a concern about borrowing costs if loans become pricier.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $500000000 (Low: $300000000, High: $800000000)
Year 2: $550000000 (Low: $350000000, High: $850000000)
Year 3: $605000000 (Low: $385000000, High: $930000000)
Year 5: $715000000 (Low: $455000000, High: $1095000000)
Year 10: $930000000 (Low: $590000000, High: $1420000000)
Year 100: $3170000000 (Low: $2010000000, High: $4780000000)
Key Considerations
- Enforcement of foreign holding limits may require new governmental infrastructure and oversight.
- Negotiations and foreign policy adjustments may be necessary to prevent diplomatic or trade conflicts.
- Potential for domestic financial institutions to increase holdings as foreign holders decrease.