Comment by rat87
2 months ago
This is insane. Most countries are in debt and there's nothing wrong with that unless it becomes too high. Choosing to default is a choice with no benifits that would crash the world economy for no reason and permanently hobble the country
A default would be a silly thing on a national scale. You'd essentially reset your debt and piss off a lot of foreign powers, but the economy would continue working as before, since you'd immediately print a whole bunch of new (virtual) money. Chances are a great deal of countries will just go along with it to not grind their own economies into pieces when they suddenly can't buy/sell from/to the US any more.
This is assuming you never get to the stage of hyperinflation, but you can probably just print a whole bunch of new physical currency as well.
I have a few degrees in economics. You have absolutely zero idea what you're talking about if you think a US default would have the economy "continue working as before". A US default would make the 08 financial crisis look like a lemonade stand going out of business. This way of thinking is so dangerous because you people don't know what you don't know. Musk and the tech bros are playing Russian roulette with all of our livelihoods.
Yeah, parent comment is scary - glad you called it out. Although I don't have an economics degree, I do a lot of bond future trading on the side and am in fairly good tune with the bond market/how their yields work. The effect on the bond yields alone if the US defaulted would be disastrous.
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You dont think a single american or american company/bank holds any gov bonds?