If Greece Defaults this is what happens next......

[Mircea]

Originally Posted by summers73

I'm not opposed to them having their own currency, just not being able to inflate it would be the best bet, however. It would wipe out hard earned savings from families and the elderly.

Their currency would be worthless, just like it was before they adopted the Euro.

Originally Posted by Toyman at Jewel Lake

I'm questioning a little different issue. If they default, will the country go through a bankruptcy? Perhaps be broken up and divided up between the creditors? Which would be the taxpayers of the nations that lent them money...has the US lent them money? Maybe we can all share our own little Greek island!

Um, no. Many countries have defaulted on their debt payments, but no country has ever defaulted on its debt.

When the Dominican Republic defaulted on its debt payments, the US declared war on the Dominican Republic, invaded the country, overthrew the government and took the money.

That was LBJ in 1965 or 1966.

Outside of the bizarre actions of the US, when a country defaults, its loans are structured so that the country can repay the debt (viz Argentina and Russia as examples) and that usually means austerity programs as the government has to cut back spending.

If the US does not start balancing the budget and paying down its debt, it will eventually default when no countries are able or willing to purchase US debt and the US will have to implement austerity programs.

[newonecoming2]

Originally Posted by Mircea

Outside of the bizarre actions of the US, when a country defaults, its loans are structured so that the country can repay the debt (viz Argentina and Russia as examples) and that usually means austerity programs as the government has to cut back spending.

If the US does not start balancing the budget and paying down its debt, it will eventually default when no countries are able or willing to purchase US debt and the US will have to implement austerity programs.

Our nation's debt is currency and it is the world's reserve currency. When no one will buy our debt we will just print the debt as cash and spend it. Hyper inflation.

We can leave our spending where it is we just need an enforced savings plan as well as a much higher minimum wage.

[Joe_Ryder]

Originally Posted by newonecoming2

Our nation's debt is currency and it is the world's reserve currency. When no one will buy our debt we will just print the debt as cash and spend it. Hyper inflation.

We can leave our spending where it is we just need an enforced savings plan as well as a much higher minimum wage.

So the lifetime of savings of many retired people just goes straight into the toilet. Congratulations! You just created yet another dependent class.

[wrench409]

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[newonecoming2]

Originally Posted by Joe_Ryder

So the lifetime of savings of many retired people just goes straight into the toilet. Congratulations! You just created yet another dependent class.

Not me, that is just what I see as a likely outcome if we don't take steps to change the direction we are headed. We need full employment and much higher wages. Personal savings will take a hit but not as bad as if you just rite people checks when the debt comes doe. The nation's debt is cash. Upon maturity you can just write a check equal to the amount of the T-bill and say have a nice day, but you may want to spend it quickly as it will drop in value fast. That is what I want to avaid.