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Or in case of default, no guarantee the debt will be paid at all.
by smileysteve 3y ago
Or in case of default, no guarantee the debt will be paid at all.
- toast0 3y agoTechnically, the debt is in default when it is not timely paid. There's clearly a danger of that if a deal isn't struck in time. Assuming it's resolved quickly each time, it's more complex, but not a huge deal. I don't think there's much danger of the debt not being paid at all, or paid at less than agreed face value and coupons. That would be a whole different thing, the 14th amendment says all public debts of the United States are valid, and to do otherwise would be a huge change, with major consequences. People don't buy long term Treasury securities because they think it's a good credit risk, they do it because they think there's no credit risk. If that changes, the whole game changes.