Re: I just don\'t understand public debt!
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Why can't we just stop paying the debt (currently like $8 trillion, 67% of GDP)? Would somebody declare war on us or would the government just spontaneously implode? Will the debt EVER be paid off, like in the lifetime of the USA? Can the debt holders demand for all $8 trillion in debt to be called in? What happens if they do that and we don't have the money?
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As someone else also pointed out, the US Government effectively control the currency the debt is denominated in, there's no real reason not to pay the debt. That does not mean they cannot default on the debt, but that would force the government to fund all government spending internally going forward, which, given our budget outlook, would be extremely inflationary. Oh yeah and just about every major bank in the world would go down and the entire global economy would freeze.
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