Government debt isn't like personal debt or business debt. The treasury can choose to not honur it, and there's nothing anybody can do about it. Of course they're not going to find a market to sell more debt to after that, but wouldn't you say they already have enough?
No sympathy for people and institutions who make deals with the devil and expect the government to forever enslave taxpayers to honour those deals and pay back with interest.
As mentioned defaults do shockingly little to change future funding. Its been years since i looked but its something like a few years of “cool down” on issuance and a few points of coupon premium. The economist has done some great, very accessible, articles on this over the years.
Second, its critical that treasury bonds are denominated in USD. The us gov controls the monetary policy and can choose to inflate away the debt over time. This is in contrast to EM debt where they get trapped with foreign denominated bonds. See also the tensions around EU debt, greece, etc.
> Of course they're not going to find a market to sell more debt to after that
Argentina is doing fine. The real constraint would be that defaulting on the debt would cause a credit crisis and bank collapses.
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Not true
The powerful people holding the debt will seek to change the government to one that obeys them
The way I understand my money market settlement account at vanguard, is that it's all, or nearly all, treasuries. Treasury not honoring government debt would be the worst bank failure in the history of the world.
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We also don’t have anywhere near $175 trillion in debt. That’s a crazy made up number.