Okay A2K Genius' Here's A Serious Question

We'd be fucked. This is the world's largest consumer economy. Other nations come here to sell things to us, not to buy them from us. That's not to say that we don't have any exports to offer--and your scenario would cut that off at the knees. You might get a surge in employment as capitalists moved to supply the demand for goods which we were no longer importing, but in a closed market, the effect would not be great. The effect of the potential of our economy to produce most of what it needs serves to keep down the costs of imported goods. But that goes away in your scenario. There would equally be no competitve incentive for domestic manufacturers to keep prices down, and quality up. Think GM if they didn't have to compete with Honda and Toyota.

If we defaulted on our debts, that would seriously piss off China, who is holding most of our notes. That might not be such a bad thing, but your scenario also cuts Wal Mart off at the knees, because they rely on cheap Chinese imports to keep prices down. Most of the rest of the government's debts are held by American banks and individual citizens.

Why do you want to **** over the holders of Treasury bonds, Boss?

Cant declare bankruptcy unless you actually are.
assets + income.
government programs and public works would be wound up putting thousands out of work. the flow on effects of this would see millions also laid off.
Assets would or could be sold. roads, bridges, public buildings semi and quasi government programs (like NASA and hundreds of others) would be wound up.

I think the country would be in for an economic depression the likes of which you never even dreamed of.

Well, it's not like there's any bailiffs who could come around to take things from us, DP.

Well Big Dawg I like to ****... but I was just asking a what if question out of intellectual curiousity, although I realize it will come as a shock to most to consider I have an intellect .

that's what I was wondering as well. If we had nothing left we still have enough missiles to level every country on Earth twice. I'm not suggesting by any means.... just saying...

You mentioned China

Ah, you like to **** . . . but do you like to be fucked up the ass?

nope.....and I don't wnat to **** anyone either. that was my little joke, as I'm sure you know I'm just interested in an academic way, of what different scenarios people think might occur.

If the US today declared that they would not pay back any of our issued debt, the US would never be able to borrow from the rest of the world again. No one would take dollars for trade since the dollar is clearly not backed by the US government. That means no trade at all until we can build up a stock of foreign currency. It also likely means that foreign countries would foreclose on anything that looks like a US asset, including plants owned by US businesses. All those giant US banks would be belly up and the resulting financial turmoil would mean that no businesses anywhere could borrow. Without the ability to borrow to cover short term expenses, many of these businesses will go out of business so farmers can't bring in crops, car dealers can't get cars to sell, real-estate can't be bought or sold. All told, I don't think this is a good idea.

Yeah, probably not a good idea. For those with a good stock of dollars, I doubt they would be acceptable for any kind of transaction.