Find the best financial services for you at: SMARTFINANCESOLUTIONS.NET - If there is no consequence such as bankruptcy or seizing assets of unpaid government debt..then why do countr? - although Obama continues to talk as he did tonight about paying off deficits and getting spending under control, the reality is that the US currently owes $12 trillion in debt to other countries, which shows no signs of improvement despite Obama's claims with the current state of the economy. In any case, someone mentioned in a previous question that government can't go bankrupt and there is no particular collateral that other countries stand to gain or seize in the event of an unpaid debt. The worst I can think of aside from that is there inflation, and the value of the dollar will go down in the US while meanwhile the financial situation/power may increase in countries that we owe money, particularly China, eventually to exceed that of the US if it gets to that point. My question is why do countries continue to allow the US to borrow if there is nothing they can do when we don't repay the debt? Note that we currently owe China $6 trillion and our total debt is approximately $12 trillion. Do countries really just continue to let us borrow in hopes that they might ultimately achieve fiscal power over the US? I doubt if that is enough incentive.
Also, how it is that the US is considered the world's most powerful nation when we owe $12 trillion and are still borrowing from other countries, which evidently have [more] money [than us] to let us borrow? If the other countries are not more powerful, then where do they get so much money to let the US borrow [note that money obtained from exports such as those from China will also create inflation somewhere along the line]? -
