Comment by CraigJPerry

>> the world stops buying US bonds and suddenly they are bankrupt and can not pay its debts

How does this work exactly? It doesn't. It's a misunderstanding of public debt.

When you say stops buying US bonds, you're talking about the secondary market for US government bonds right - because in practice, contrary to the econ textbooks and common understanding, only a small number of institutions are allowed to purchase them in the primary market, not only that but these purchasers are compelled by law to continue buying them, to continue bidding for them at a fair price, and if they don't have the reserves to buy them then these purchasers will be given the reserves to continue to buy them. The entire premise of the argument falls apart as soon as you step away from the econ model and look at the legislation governing what actually happens by law.