
What Would Happen If USA Stopped Paying Its Debt?
The United States has more than $21 trillion
in national debt. Let’s try and get our heads around just how much money that is.
Firstly, what’s a trillion? A trillion is 1 thousand billion, or 1 followed by 12 zeros.
That’s a big number, so let’s break it down. If we assume you are a millionaire and
you have all your money in $1,000 bills, that’s 1,000 of them to make up your million…and
if you stacked the bills on top of each other, that stack would be just over 4 inches high.
You’d be pretty happy! Now let’s say you had 1,000 of those stacks making you a billionaire.
The cash would now be 358 feet tall, which is roughly the height of a 35-story building.
And what if you had a thousand of those stacks, making you a trillionaire? Well then your
cash stack would be 67.9 miles high, which is more than 9 times the height that a commercial
airline flies. Now that’s just 1 trillion dollars and the US debt is a cool 21 trillion.
In today’s episode of The Infographics Show, we’re going to be looking at: What Would
Happen If The Us Defaulted On Its Debt? You don’t just wake up one day and find
yourself owing a stack of money that would stretch to the moon. It takes a lot of spending.
50 years ago, the US national debt was around $350 billion and the 1 trillion mile-stone
was not reached until the early 1980’s. But that’s still a big jump to arrive at
today’s 21 trillion. With big tax cuts, spending on things such as war, and then with
economic stimulus packages, it all adds up. The debt rises because if the US government
spends more money than it collects in taxes, then it needs to make up the shortfall by
selling US Treasury bonds to investors. These investors are typically other countries. So what’s defaulting all about? When a country
defaults on its debt, it’s called a sovereign default. If the US were to default, it would
essentially stop paying the money it owed to the investors of the US Treasury bonds.
There‘s a lot of speculation online about what would happen if the US stopped making
these payments, and though many of the major media outlets have run features exploring
this question, no one really knows exactly what would take place. The general consensus
is that world markets would plunge and global interest rates would be considerably hitched
up. And of course the impact would be felt by the US’s creditors…those other countries,
who are owed the money. Let’s take a look at 5 potential knock on effects, that would
occur as a result of the US defaulting on its debt. Depression and unemployment – The Treasury
and Federal Reserve, would make their way through banks and eventually blow a hole through
the Main Street economy. The unemployment rate would rise and huge amounts of uncertainty
would take center stage. The stock market would suffer, with stock prices falling, as
investors fled to other countries for safer stock or gold investments. Recession would
be on the economic horizon. Public service disruption – There would
be no money to pay salaries or benefits for federal or military personnel and retirees,
social security recipients, Medicare bills, student loans, tax refunds, and payments to
keep government facilities open. The result would create a great deal of disruption and
unrest across the American public. Affect on Business – A U.S. debt default would
significantly raise the cost of doing business. Companies would have to pay higher interest
rates on loans and bonds to compete with the higher interest rates of the U.S. Treasury.
There would be price increases on goods and services and rising inflation. Business would
suffer and as a result there would be higher unemployment. US Dollar Impact – There would be mass selling
of the U.S. dollar, an event that would threaten the greenback’s status as the world’s reserve
currency. Prices for everyday commodities would go up, our groceries, clothes, and fuel,
all would rise. And we’d be saying goodbye to low mortgage rates. All of this would affect
buying patterns, which again would further impact the economy. Global Markets Impacted – The US economy
has far reaching impact so it would not only be the homeland where the effects would be
felt. According to CNN Money, who referenced treasury numbers in a 2016 feature, foreign
nations hold just over 32% of the US debt. The list is long but China and Japan stand
out with over 50% of the 32%. As an example, Japan owns about $1.14 trillion. This is equivalent
to 20% of its annual economic output and would shake the Japanese economy for sure. This speculation is all fascinating, we hear
you say, but do we have anything to base the assumptions on? Let’s look at a real example
in another country. The most recent debt crisis was in Greece in 2015. The country formally
defaulted on a $1.7 billion payment to the International Monetary Fund in Athens. Nowhere
near a trillion, but it was still hugely disruptive to this Balkan tourist destination. The Guardian
ran an article last year, looking at the effects of the Greek default. They referenced a study
by the DiaNeosis thinktank, which found that in 2015, 15% of the population, or 1.6 million
people, earned below the extreme poverty threshold, when 6 years previously, in 2009, that number
did not exceed 2.2%. And according to the Bank of Greece, the net wealth of Greek households
fell by a staggering 40% in the same period. Though unemployment did drop, it is still
the highest in the European Union at 22%. What did this mean to an everyday Greek person?
One example is Chryssa Christodoulaki, a French-trained hairdresser had paid into a pension fund for
almost 45 years. Her pension started out at €1,750 a month. Then it was cut to €1,430
a month, and then cut again to €960 a month. It’s not a pretty picture, but then how
realistic is the prospect of the US defaulting on its debt? From everything we researched,
it certainly seems highly unlikely. One reason is that all U.S. government debt is denominated
in U.S. dollar assets, but a more intriguing reason the US would apparently never default,
in the words of Alan Greenspan, an American economist who served as Chairman of the Federal
Reserve of the United States from 1987 to 2006, is that “The United States can pay any
debt it has because it can always print money to do that. So there is zero probability of
default.” We’re not entirely sure how true that is, but it’s certainly an interesting
idea to consider. So, what do you think would happen if the
US defaulted on its debt? War? Famine? The Apocalypse? Let us know your thoughts in the
comments! Also, be sure to check out our other video called How is Life Different for Billionaires?!
Thanks for watching, and, as always, don’t forget to like, share, and subscribe. See
you next time!
Also watch our video "What If The US Paid Off Its Debt?
https://www.youtube.com/watch?v=_3Lizrgbb9s
Chop down the rothschilds and their FED reserve. America should make their own currency again. End the zionist ZOG jew strangle hold
Let it DIE! It's all a crooked Ponzi scheme anyway!
What if the US can pay it's debt, it just doesn't want to? what if instead of paying it's debt it will just use the money for it's citizens?
Slightly over 88% of goods and services are produced in the USA,the rest could be produced in the USA!!!:)
it is now at $22.5 trillion. as of August 18, 2019.
in FACT IF EVERYONE WOULD STOP PAYING THEIR SO -CALLED DEBT THE ECONOMY WOULD FLOURISH. AND THE BANKERS IN JAIL.
If I were China or Japan, and USA decided to default, I’d just tell them to sell their national assets to recover the cost they owe me, and then make beneficial trade deals with me in order to pay off the remainder.
dotard maga trumptard
money is an illusion and is only valuable if the majority of people believe it is
America could pay off their debt in short order if they stopped giving money away to other countries.
out print all debts…yeah right. as if this has ever work in history…
I don't know but we should FORCE our government to quit borrowing ( then sending if not all of the money but a vast portion of it to other countries) , then we can try it and find out. Besides realistically no matter what we do we are going to default on our debt . So we should do what we can to protect this country and default on our terms rather than being forced by necessity into defaulting.
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The more money you print the less it's worth so you'll never actually end up printing enough to pay off the debt that you owe.
The only way to stop this: communism.
A big argument and that's about
Then just throw your money in the street if it’s valueless…
Yeah, I didn’t think so. It’s got value and won’t go away. So let’s quit acting like the Dollar doesn’t or will ever lose value, except for extreme circumstances, obviously.
What money you can't pay a debt with a promissory note? Or can you?
PROBABLY nothing,.. is probably to reach agreements to stop communism and re-stablish statements,..
The US does not print money… the “federal reserve does all the printing “.
How to become a trillionaire:
Create crypto currency
Create 1 trillion of whatever you call your currency
Claim that 1 USD equals 1 whatever you call you CC
Bitcoin would probably replace it. Government wants to spend spend spend and acts like a tax cut causes more debt. Stop spending
We the American people don't want to have any dealing with china at all anymore. They are immoral and inhumane to their own people and look at all the atrocities that china did to the peaceful Tibetan people. They rob and steal constantly from America and we the American people will not stand for the paper tiger china's bs any longer. We don't need china or trust their immoral lying corrupt criminal country. End all ties with china.
Now, 23T.
Remember one thing. USA could print money as much as it wants, but when countries say no to dollars. Dollars are know worthless.
Sure, just continue to inflate until the dollar becomes absolutely worthless (law of supply and demand). THAT won't send the economy into a devastating depression (increased velocity and people trading in money for things with actual value leading to the fall of the American dollar)… We need to figure this out logically: You can't just create more money when there is a deficit. Why aren't we holding our government accountable for their spending?
Printing money to pay off debts? Would that not create huge inflation and also price rising?
Oooooooooooooooooooooooohhhhhhh iiiiiiiiiimmmmmm coommmmmmmmminnnng!!!
And they say, "money doesn't grow on trees " it's as simple as a button according to this guy. What could possibly go wrong? Pre-Purge
Seems that tax cuts don't pay for themselves…hey I've been had!
But who are we paying this debt to? The world's in debt but who are we paying? Who do we owe?
This video is BS. The assumption that most of U.S. debt is owned by other countries (i.e. sovereign) doesn't hold since those same countries are also supposedly in massive debt. The massive debt spoken of is a lie to instill fear of depression if we end the federal reserve bank. Sure there would be a depression but only because the owners of the federal reserve banks would make it happen. There is no such thing as a free market. It has been artificially controlled for a long time now.
What if all countries stop using the USD.
Alot of people scream about this but it isn't impossible as 21 trillion is just above the us 17 trillion GDP
Print money? Seems like people haven't looked at Zimbabwe
3:56 closing eye
The only reality is that America holds the socialism,..
Dude why is this guy talking about measurments and debt. It's ratios and fractions dude, nothing more. (Brain hemorrhaging)
Alright what if everyone just didn’t pay taxes they can’t arrest all of us
Whoa whoa this is how our debt really works, for this example let’s say we owe China 10trillion, & so if our economy crashes & the value of our dollar crashes so would the debt China owns, so they would lose that $10 trillion dollar asset they have & it would plunge their country into an economic crash n prolly bankrupt China & so China needs our economy & dollar value to be Great because it’s like the stock market & for example let’s say Bitcoin(pretend its stable for this example) let’s say Bitcoin is worth 10k a coin & you buy 10coins for 100k but then Bitcoin crashes to $1 a coin, your 100k investment would now be worth only $10… & also The USA has so many assets & territory’s that it could pay off its debt today.. for example let’s say u have 100 million & u take that 100mil & Buy TEN 10million dollar houses, & pay them off completely & so now u have zero liquid income but you have $100 mill in assets & since u have zero liquid income right after the purchase, lets say U take out a loan(for this example the loan has 0% interest) & this loan is a 30yr loan for $60million & u make monthly payments for 30yrs to pay off that loan, Now u have a $60 million dollar Debt u owe to the bank but you are not broke & u still have a lot of net worth & after 30yrs of monthly payments that 60million dollar debt is paid off……BUT if u wanted too u could sell 6 of those houses that are worth 10mill each & pay off ur 60million dollar debt right now & still be at a $40 mill surplus due to the $40mill left in assets & now $0 Debt! The Reason the USA has a High Credit rating is due to our dollar & all the other assets & property it owns , that’s why it could be in trillions of dollars in debt but still have a high credit rating! That’s the simplified version with some examples to try & explain it
If we can just print money to pay our debts then why do we owe 22 trillion dollars?
US dollar is more lifeline to people around the world than the US themselves. considering dollar obsolete means the world itself will become obsolete in a moment. tat means entire world will doom itself in no time.
The End
Trump Just Added $600 Billion in Last 90 days, making Debt $22.2 Trillion (Trump has Spent Most Any President in US history) 9000 Store closed in last 2 years (adding to Corp. Real Estate Bubble) many Workers taking 2–3 TEMP jobs, but what happens when End Christmas Season? 7 million (30 under and Sub Prime loan holders) are 90+ days over due ($13.5 Trillion Auto Loan Bubble)
America is a ticking time bomb
We need to return to a gold standard.
Why isn't a trillion just over 999 million billion dollars? It's just over 999 million to make a billion so I would think it would have to go into the millions of billions before becoming a trillion
What Alan Greenspan said is technically correct but not complete. US dollar is a fiat currency which only has value when people thinks it has value. If the Feds decides to open up the printing press, all confidence will evaporate and the money becomes useless. I just hope I am not around to see this day!
Every Country has a printing press to print money out of thin air true or false?
THIS ENTIRE VIDEO IS FALSE — It is NOTHING but FEAR MONGERING and it totally misrepresents how our monetary system ACTUALLY WORKS. First off the US creates US dollars – it does not borrow them from China or anyone else. Think about it —- Can you create a US dollar?? Can China?? NOPE. US Govt can have Federal Reserve Make as many US Dollars as it needs. The dollar is not on a fixed exchange because we do not have that as our monetary system . The US dollar gets its value not by being backed by anything – it gets its value because citizens have to pay taxes in the dollar. This monetary system is called Chartalism and it has been around for thousands of years – you see it through out history (2,000 years ago Pompey had chartalism). US CAN ALWAYS PAY ITS DEBT. And don't tell me about inflation – we HAVE NONE. How could we, avg person has no money — Money printing does not cause inflation — MONEY SPENDING DOES>
THIS VIDEO IS A LIE—- A country that creates its own currency and has debt denominated in that currency CAN ALWAYS ALWAYS ALWAYS PAY ALL OF ITS DEBTS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Some of these Market predictions are laughable
the united states would not have that debt if we quit giveing money away to every country and there dogs and get nothing in return
Thanks for that piece of s*** Barack Obama at f**** put his eighth that spent eight and a half trillion dollars on what absolutely nothing besides throwing it into his f**** pocket and building up the countries besides the United States that piece of s*** can go f*** off he needs a f**** write us a check
Yeah like I really trust CNN you know the clown News Network
Instead the US government will audit the feds and see how corrupt they are, and will then do away with them
Sending Mr Rotchilds bankruptcy
The value of the US $ is pegged to Saudi oil!
Truth is Americas debt is a illusion it isn't real. 22t is not real their isn't enough trees on this planet to print that much. The goverment just creates fake debt numbers. It's just basically a way of saying we owe debt we need to raise your taxes to cover it forever.
Money only exist if we the people believe it holds value. If we ever decided it was worthless it would be toilet paper.
Maybe America could call in its debts? You know, for all the military hardware and personnel used and lost over the last 40 yrs or so.
That's $70,000 per person, double that per worker!
So what you are saying is the USA is being funded by the rest of the world to the tune of 21Trillion, this is contrary to what Trump has been telling his trump-pets. They believe him when he says the world is cheating America.
Anyone who interferes in this Ponzi scheme Will be killed Survivors will be economically Obliterated
Malaysia country please don't follow USA country debt liabilities.
My economics professor said it would be like "dropping a nuclear bomb on the American economy" if the US defaulted on its debt. I don't know the details, but I don't think I want to live through an economic fallout/apocalypse.
it would be nice to know how we could stop the debt from growing.
Could someone please explain the meaning of ‘debt ceiling’?
Well I said we can print money an if we can print t we can cut the dept u no
Who exactly do we owe if you are strongest country with best military who do we have to pay…DEBT IS A LIE.
you know how rich person stays rich you tell everyone your broke…ALL IS A LIE…ALL WORLD LEADERS WORK TOGETHER TO KEEP US TRAPPED WITH FAKE PROPAGANDA…
So printing money is soln
What about paying 22 trillion and printing maybe 18 trillion and make it in circulation what would be the situation of inflation
And a country with just inflated money but no inflated wages and inflated emloyment and living std. and that will decrease value of dollar as global currency and then if countries start to ditch dollar there will be a collapsed foreign reserve
No printing is bad idea 😑😑
America will be posibly the best off country across the globe should the world currency crashes; most sustainable agricultural location given current population, with an national infrastructure capable of operating independent of foreign imports. America remains the FOOD BASKET of the would.
There is no debt…fact!
This is the problem of having the monetary system controlled by private people in lie of a government entity. The reserve and Banks are private yet the public is held accountable to pay the debt.
The Obama era did print money to bail out the banks….. remember…thats how we avoided a recession worse than what it could have been last time.
Nothing will happened. Don’t forget how many countries defaulted on their loans and USA write clean slot for them ?
I don't know where else to ask this Infographics show, do you admit Leftist bias? Because you defiantly display it.
10/22/2019 23 trillion and counting Bernie Madoff style. He was doing the same thing but got called on it. So when the Snakes get called on it??????????
if the democrats get full control this will be happening
There is no debt US owes itself , it's all a scheme to increase interested rates.
We destroy it
Obviously they will just keep printing the money.. as long as people will need it to buy oil from Saudi and other gulf countries goes on to explain why the US killed/overthrew other government that refused to sell their oil in Dollar.
They use trillions cause it sound more interesting. The truth is ….. its zero. How can anythng comes out of NOTHING? Well, didn't we buy something? Yes – that's part of the deception to complete the scheme the bankers and government created. How to get out of it? Well, again, they created it, they have to solve it. As far as I am concerned we OWE no one anything as everything comes from nothing. What debt are they calculating us againts?To whom? ….. Isn't it more sensible that we start from the beginning. …. zero and no debt. Start giving everyone as wages interest free money? GOLD maybe so they don't disappear unlike the fiat money we have now? The end for all these will always be the same no matter what. War and reset, that's it. Why not reset without wars?………. Just think about it?
Don't worry. It won't happen. Ask gordon chang.
Debt is just money USA owes to itself. Don't worry poor people, us rich people will sort it out. Trust us.
This is the result from the practice of a debt-based economy. The wealth is pulled to a minority, leaving everyone else to carry the load.
Alternately a credit-based economy, the majority thrive, and if we also remove usury based on fiat currency; we remove inflation.
The default will cause massive inflation in the U.S.A
BITCOIN!!!
nonsense.
The problem is the monopoly of fiat currency by the few corrupt bankers.
lets not forget the weimar republic and now venezuela. who has over 1,000,000% INFLATION rate.yes running those printing presses,
sure solves the debt problem.
If they default … you default. Revenue down but so are expenses.
$1,000 bills?
Do these guys live outside of the US?
War
cough cough**california
Printing more money causes inflation. Congress just keeps on raising the debt ceiling on spending. Americans cry about medicaid, retirement, cost of living, credit card debt with low wages and life goes on.
I wonder if it would have an affect on the third world panhandlers squatting in America.
Kosovo is Serbia, it's not that hard
I don't think USA can print dollars as much they want because if they do so the value of dollar will fall ( demand and supply theory) the condition will similarly like Germany after ww1 and like Venezuela. One thing They can do is that USA has largest reserve of gold they can start trading with that
you mean start paying? otherwise i'm not sure what they doing since it's coorporate debt is highest in last few decades and it keep hitting that ww2 mark, when it was something like 115% over bdp (now it's like 108 or something).
23 trillion now. Crash coming…this debt money train cant last forever.