Skip over this long post if you dislike reading lots or the things I say.
Not going to simplify it.
Gah I want to change my answer.
I put no jobs, major debt, but what's really going to happen is that the debt will disappear because the USA will cease to exist. We're going to go bankrupt because of the massive debt like Greece did
See, here's what I don't get about national bankruptcy. It's likely due to my lack of knowledge in international economics and politics, but whatever.
Let's say America goes bankrupt.
It happens to owe lots of money to China (let's just say China, instead of listing every country it owes to).
China wants it's money back. The USA can't pay up. There is not enough money.
America declares itself "bankrupt" (or the version of that which relates to countries?).
Does China ignore the debts owed to it? Unlikely. No one else is going to pay for it. China still wants their money back.
America can't pay up and refuses to pay up.
What can the Chinese do about it?
You can't invade America and conquer it. Even if it's poor, it still has a military. It still has defences. Nuclear weaponry as but one extreme example.
So, if you can't invade America, because that's never going to end well for anyone, then what can China do to force America to pay up?
It could cease all exports to the USA.
This is likely the biggest threat. But, how much of the USA's import is Chinese alone? (I expect it to be a big chunk, but it can't be all of it)
And also, how much of China's exports go to the USA? Cutting that off is cutting off a lot of Chinese business, losing them lots of money.
What if they sell their USA resources to the rest of the world. There might not be the demand for it. Or it might over-saturate the market and make it worthless, so you would still lose out on money, being the Chinese.
Surely America has the capabilities to provide resources for itself?
It's definitely not going to be entirely ostracised from the International Community just because China has stopped trading. I wouldn't imagine that the whole of Europe or Africa or Asia or South America would just cancel all trades to America just on the say-so of China.
China might have a lot of money put into these places already, but surely not enough to make up for the losses that these places lose from their cease of trade with the USA.
So, if America were to just up and say "We're not paying back our debts", then what is there to actually stop them, short of a full on invasion?
Perhaps with smaller countries, particularly those outside of any international unions, such as the European Union, you might be able to "financially siege" them into having to pay somehow, but the USA is so big and so important in International Relations that you surely couldn't lock them down into submission.
Similarly you couldn't do so to countries like the UK, or Australia or Russia, or many European countries, particularly if they all join together as the EU.
I know I'm simplifying it down an awful lot, since a lot of the debt is not by national governments, but rather through businesses, but to some extent, am I speaking sense, or just pure dribble. (I'm about 50/50 on which one.)
If all the countries that are in tough economic positions were to just cancel their debts to each other (Just forget about it. Turn over a fresh leaf.), then surely they could start anew, and likely stand up to any of the more economically stable countries which still demand their debts be repaid?
I know none of the above would ever ever happen, but out of curiosities sake, is it even possible? Could it work like that?
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