Originally Posted by
SamDiamond
Philly, I am going to give you a non-wiseass answer.
If the United States defaulted on their debt obligations it would rain down a world of shit on US citizens.
The treasury has some cash on hand--- so for a period of about 2 weeks--- October 17th-October 30th---- that money will run out.
And then they still could pass an interest-only payment on Halloween.
But if they failed to do that----- Holy shit. Duck.
Then---disaster hits.
There will most likely be a run on the bond market.
Senior citizens and the disabled will no longer get social security checks. If anyone here has a parent or relative that lives on social security-- they would be fuked. It would be game over.
Everyone who works for a defense contractor would no longer get paid.
Soldiers-- would not receive their pay.
Those that live in government housing (senior citizens in nursing homes not welfare queens)-- would be fuked.
Now- the indirect hit. Hitting social security recipients would take billions upon billions out of the economy--- so retailers, mom and pop stores, big chain employers all would get hammered.
There would be a run on savings accounts, the stock market, and every other investment arm available.
Because the United States has always paid their debts-- we are able to borrow as a country and get low interest rates---defaulting will change that-- so America will pay more to borrow and that cost would be passed on to each of us through increased tax rates.
There is no way in hell defaulting will help the average american citizen. If will make things fundamentally worse.
It will cost more to buy a home, to buy groceries, to buy an automobile, to pay for internet, cable, travel-- every aspect of their lives will increase.