re: Powell: ‘The US is on an unsustainable fiscal path’

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The current "old" government "collapses", "new" government that will be functionally the same takes over, national debt is erased because it was taken out by the now defunct "old" government and the new one declines to acknowledge it, "risk of investment" being what it is and everything.

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The USD would collapse in such a scenario and bring not only the US down with it but most of the world's economies as well. A large part of the Dollar's value is derived not just from how many exist, but also how desirable our debt is and the currency's role as being the primary world reserve currency.

Proclaiming all federal debt null and void would destroy the economy (most, if not all, pensions and retirement funds are invested in federal securities to some extent) and ruin the value of US debt (ie: no one would buy securities any longer since the government just fricked everyone who had lent them money). That plummeting value would quickly kill the USD as the primary world reserve currency (thus speeding up the demise of the USD).