4 ms·
Except this whole concept of a developed economy defaulting on it's debt is to all extents and purposes irrelevant. The US government has the ability to raise
by kierank 17y ago
Except this whole concept of a developed economy defaulting on it's debt is to all extents and purposes irrelevant.
The US government has the ability to raise taxes and has organisations which can enforce these tax rises and an army to defend itself. It also has vast assets that it can sell off. Whilst the market might think that the Treasury is more likely to default than Coca-Cola, the markets don't represent reality in this instance.
- loganfrederick 17y agoYou'd be surprised. Russia, which was still a pretty decent sized world power, defaulted on its debt in the 90s. I'm not an expert on what occurred, but I believe the Russian government thought process was something along the lines of: -We could either sell off all the country's assets OR -Default on debt now, have a bad reputation with future foreign investors, but not shrink our country further. They went with option B. Not saying this would or will happen to the USA, but theoretically it could.