Work it through. Lets say China and the US go to war, or China invades Taiwan and the US places sanctions on them. Would the US pay back bonds owned by China during the war?.....So lets figure out what woudl happen if US debt was cut by Billions because they just cancelled debt from belligerents...... The world economic system would collapse??? Would it?
I had a discussion with someone who like you said it was all doom and gloom etc and had worked in the World bank. But if the US just cancelled its debt to China and ignored any "rulings" from world organisations to repay it and China could not enforce it then how would that affect the US. The biggest question is could the US ever raise debt outside the US ever again?...Probably not , (unless from close allies), but internally they still could.
It is an interesting question that if looked at from the point of not obeying any current rules has some interesting outcomes.
