All you debt ceiling Nazis, why hasn't Japan defaulted with a debt of 198% of GDP ??
Simple. Because the vast majority of Japanese debt is held by the Japanese people.
The US could immediately and surprisingly default on its foreign held debt, bail out the US banks, insurance companies, monetize social security, and probably still come out of it with a stronger US dollar.
That is silly. By that logic, we could issue more debt and sell it only to Americans, and the problem is fixed. Also what % does it become a problem??
http://upload.wikimedia.org/wikipedia/commons/1/17/Estimated_ownership_of_treasury_securities_by_year.gifThe amount of owned by foreigners has barely moved over the last 15 years, why hasn't it been an issue before?
Then there is Canada, with 16.5% of total public debt held by Non-Residents. Canada has a public debt ratio of 84% of GDP, compared with America's 62% of GDP. Wouldn't Canada be in more of a debt crisis than America???
http://www.fin.gc.ca/dtman/2009-2010/DMR2010_ENG.pdf (Pg 23.)
