As mentioned defaults do shockingly little to change future funding. Its been years since i looked but its something like a few years of “cool down” on issuance and a few points of coupon premium. The economist has done some great, very accessible, articles on this over the years.
replySecond, its critical that treasury bonds are denominated in USD. The us gov controls the monetary policy and can choose to inflate away the debt over time. This is in contrast to EM debt where they get trapped with foreign denominated bonds. See also the tensions around EU debt, greece, etc.
> Of course they're not going to find a market to sell more debt to after that
replyArgentina is doing fine. The real constraint would be that defaulting on the debt would cause a credit crisis and bank collapses.
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replyPretty sure this is why the bankruptcy guy from NY was sent in
replyNot true
replyThe powerful people holding the debt will seek to change the government to one that obeys them
The way I understand my money market settlement account at vanguard, is that it's all, or nearly all, treasuries. Treasury not honoring government debt would be the worst bank failure in the history of the world.
replyIt would be bad for you, but you also deserve that because you have made a deal with the government to enslave young people to pay taxes on their labour in order to pay interest to you. Loosing all your investments in a bond default would be a very fitting consequence for what you have done so wickedly.
replyWe also don’t have anywhere near $175 trillion in debt. That’s a crazy made up number.
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