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To be clear: the consequence is that, the next time around, nobody will lend to us if we need it (which is why we would have to start balancing the budget)?
by catlover76 3y ago
To be clear: the consequence is that, the next time around, nobody will lend to us if we need it (which is why we would have to start balancing the budget)?
- s1artibartfast 3y agoNext time is every single year because the US, like most countries, need to borrow to run the government.
- hippoSquid 3y agoYes we would need to immediately start running a balanced budget. It would probably be a long time before we could borrow again. If we ever did borrow money again, we would be paying a higher interest since we've shown lenders that we can default. It would also mean $33T in assets disappearing from the economy. That's a massive amount that would bankrupt tons of individuals/companies that lent the money. $2.8T of that amount is the social security trust fund which means we need to also instantly cut social security too. $7T of the debt is held by other countries who wouldn't be happy with us either.