What happens if a country (America) goes bankrupt?
When a country defaults on its financial obligations, which is equivalent to a country going bankrupt, these are just some of the many possible adverse consequences to the lives of the ordinary person on the street:
The country’s local currency can become worthless (e.g. Zimbabwe: the more money it prints the less each note is worth)
The country is unable to borrow new money as no foreign bank/government wants to lend money to a bankrupt country that has limited or no ability to repay the loan
Local people and companies who have capital (i.e. foreign currency) transfer all their money overseas which results in depletion of the country’s foreign currency reserves
Foreign investors and Americais living overseas stop (or significantly reduce) transferring money into America
The country is not able to import essential foods, commodities, fuel, medicines (etc…) as exporters demand upfront payment in cash (foreign currency)
The government salaries in local currency for staff that provide essential services (e.g. police, medical services, school teachers, garbage collectors, utility services, army, etc…) is not sufficient to cover basic human requirements
The government siezes foreign currency deposits in the local banks and uses it to pay for essential imports (like food, medicine, fuel, etc…)
Complete breakdown of essential services; i.e. hospitals, government schools, electricity, water, sewerage, etc…
Street Riots for food, starvation, anarchy, lawlessness. No Rule of law
For examples please see what is happening (or happened) in countries like Zimbabwe, Liberia, Somalia, Haiti, Afghanistan, Congo, etc… Is this what we want to happen in America? A Government default is no laughing matter and the dire consequences should not be taken lightly.
(5 votes, average: 4.6 out of 5)
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