Q: Does 12 USC 411 mean that debts are obligations of the United States?
One of my friends wanted to know if 12 USC 411 makes it the government's responsibility to pay back debts and loans given the wording "The said notes shall be obligations of the United States". They believe that because of this if they take out a loan they have no obligation to pay it back as that "responsibility falls on the United State's shoulders". I tried telling them that you have to pay back your debts but they kept referring me back to this.
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A:
Your friend is misunderstanding the purpose of 12 USC 411. The phrase "The said notes shall be obligations of the United States" refers to the currency itself, meaning that Federal Reserve notes are backed by the U.S. government. This ensures that the currency is legal tender for debts and that it has value as money.
However, this doesn't mean that personal debts or loans taken out by individuals are the responsibility of the government. When you borrow money, you are entering into a contract to repay that debt. The responsibility to pay back what you owe remains with you, not the government.
If you don't repay your loan, there can be serious consequences, including damage to your credit score and legal actions. It's important to understand that while the government backs the currency, it doesn't assume personal liabilities for individual debts.
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