The Washington Post reported on Thursday that Trump administration officials are looking at different ways of punishing China for its role in the COVID-19 pandemic.
The most eye-popping detail in the report was the revelation that "some administration officials have also discussed having the U.S. cancel part of its debt obligations to China," which makes it sound like they are considering a sovereign default on U.S. debt.
Even though there is no guarantee that this idea will ever be implemented, the mere notion that the administration is even entertaining it shocked veteran financial journalists.
"What the hell does this mean?" asked Axios chief financial correspondent Felix Salmon. "Does the US owe bilateral debt to China??? Or are they literally talking about defaulting on US Treasury bonds?"
"Honestly, it's tough to overstate how off the wall this is," commented Kai Rysdal of NPR's "Marketplace." "And self-destructive. And globally destabilizing."
And Politico chief economic correspondent Ben White argued that there is no way the administration will even consider this plan given that it would immediately send markets into a global meltdown.
"I have no idea what they mean by "voiding" US debt obligations to China," he wrote on Twitter. "The Chinese own $1.1 trillion in Treasury securities. Any effort to 'void' that would create unfathomable market chaos. It simply cannot be done under any circumstances."