The voting public doesn't wake up to the danger of doing this until they feel the consequences of what it's like when it comes to pass. If the public never feels the consequences of a default, then they'll keep thinking the debt ceiling is something that is okay for politicians to play around with. In order for children to understand that touching hot stoves is a bad idea, they often have to get their hands burned by the stove first.
Our standing as the global reserve currency comes more from the fact that we have the most wealth and innovation in the world--and therefor the currency that will be the most stable. Yes, trust in our ability to pay our debts is a factor, but so is the fact that OPEC+ only sells oil to other countries in $USD. That forces every country that imports OPEC+ petroleum to keep $USDs in their bank in order to keep the energy imports flowing. Defaulting on our debt would discourage foreign countries from buying our govvie bonds, but it wouldn't end the $USD as a global reserve currency.
May 26, 2023
at
7:31 PM
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