What would happen if the US government defaulted?
What happens if the U.S. defaults? If Congress doesn’t suspend or raise the debt ceiling, the government would not be able to borrow additional funds to meet its obligations, including interest payments to bondholders. The dollar’s value could collapse, and the U.S. economy would most likely sink back into recession.
What if America paid off its debt?
The US national debt is mostly owed to the American people. If the ~$17 trillion national debt were all paid off tomorrow by printing the money, then the American people would suddenly receive ~$13 trillion dollars which the US government owes them.
What happens when a country has too much debt?
When a debt gets too high for a country to pay, the country might default or fail to pay interest in time. This can lead to a wide array of different problems. Under such circumstances, a country might be forced to take extreme measures which are usually in the form of loading citizens with more payments.
What happens when an entire country goes bankrupt?
When a country reaches bankruptcy, massive inflation is the likely outcome for the country’s consumers and businesses. Stock prices often plummet, along with the value of the nation’s currency. As the value of money falls, bank runs may result as panicked citizens rush to withdraw cash from their accounts.
What happens when a country goes bust?
When a country goes bust, the pain is felt on very deep levels. The most basic systems and institutions that people have come to depend on simply disappear. Power companies stop operating, the police stopped working, gas stations close, grocery stores run out of food, postal workers stop delivering mail,…
What does it mean when country defaults?
1. verb If a person, company, or country defaults on something that they have legally agreed to do, such as paying some money or doing a piece of work before a particular time, they fail to do it. Default is also a noun. A default situation is what exists or happens unless someone or something changes it.