[ExI] Repudiating the national debt
danust2012 at gmail.com
Mon May 16 05:32:10 UTC 2016
I'd like to get back to considering what one person here believes is
unthinkable: national debt repudiation. Recall I offered that there might
be a sunny day outcome: the debt gets repudiated, lots of immediate pain
especially for large lenders who hold most of this debt, and the national
government finding it hard to borrow money for some time (and folks who
believe this to be likely and who like this outcome might think this is a
The rainy day outcome would be what? Well, John Clark believes it would
'collapse the world economy,' presumably in a fashion that would set
everything back decades or more. I'm not sure if he means a replay of
something like the Great Depression or something far worse.
There are other scenarios that can play too. I'm curious what folks here
actually believe likely and what kind of things they'd want to avoid. By
the latter, I mean some might want to play it safe even if they think a
sunny day outcome is likely. Think of playing Russian roulette: the sunny
day outcome is very likely, but the rainy day one, while less likely, is
not nil and the cost of it is extremely high. I'm sure most folks here, me
included, wouldn't want to play actual Russian roulette.
Then there's another issue: Even should we discuss the unthinkable here,
our opinions and desires are unlikely to have much impact on whether
national debt repudiation actually happens. This is more for the folks
forecasting a rainy day scenario. What can we do if a rainy day scenario
comes about? What actions can we take? Anders brought up, for raising the
likelihood of nuclear war, moving to Tasmania. Is there a Tasmania for
something like world economic collapse?
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