Debt limit hit, why not just default?

Discussion in 'Economics' started by noob_trad3r, May 16, 2011.

  1. the1


    A default doesn't necessarily clean the slate. Defaults are frequent throughout history. The empire either crumbles or the payments are simply delayed -- with more interest.

    And should a complete default occur you better get your shotgun loaded.
  2. Man, are you just plain stupid? When you go to a bank and they offer 2 rates to borrow money which do you choose?
  3. Trump's a bully. His mama read him the parable about the squeaky wheel getting the grease.

    To answer your question, it's the SAME reason why you accept a dollar bill. It's backed by the full faith and credit of the US Government (and basically nothing more).

    The lesser of two evils is to perpetually de-base and ultimately pay back debt (actually interest rather than principal in CHEAPER dollars).
  4. elon


    You think its possible to borrow at a fixed rate and then see inflation exceed that rate? Are there careless bankers out there who might overlook this possibility?