Are There any Groups or Individuals Here in the USA Who would Benefit from USA's Default on Our Debt

Any future creditor of the US government and people that have a financial stake in those creditors. Higher interest rates!

 

Are you assuming we just default and never borrow money again? The country is over? I think we'd have bigger problems if that's the case.

 

I think you have to give us a scenario on how this happens to know who stands to win. Like if we don't raise the debt ceiling, we are technically in "default," our credit is downgraded, and our borrowing costs increase, there are definite winners here in that the USA would continue borrowing money, just at a higher cost, so those creditors get more interest payments. And plenty of American investors have international investments, so the weakening of American financial power probably benefits anyone with outside investments betting against future American financial dominance.

 

Short answer: No. Not close

 

Not good for anyone with a bank account. Maybe some uber wealthy that “bet against the U.S. or move money off shore”. But I’d argue if anyone is doing that AND pushing hard for default or involved in govt, it’s tantamount to treason.

As far as “ordinary citizens”, I guess if you are so dirt poor as to have no assets. “Hey, why not default, can’t get worse”. There probably are people with seemingly little to lose or think it would be like a reset or something. But even for them, it could always get worse if suddenly they couldn’t afford to eat or if violence/chaos ended their lives.

 

Technically we are borrowing from ourselves, and I don't think we are giving up control of our currency anytime soon. So unless you have stake in treasury securities, most of us will just simply see more of our taxes go to debt servicing as opposed to other more useful and less self-inflicted things. Ultimately, I dont think many stand to gain from killing the golden goose that is the US Treasury and the relative independence of the Fed and the bureaucracy of all the agencies that keep the lights on and checks going out. But we have put plenty of idiots in charge that did exactly that in their day based on crackpot populist ideas - Andrew Jackson for example. But America wasnt 2023 America in the early half of the 1800s..

 

Hold shorts against every company with a large debt load, because their borrowing rates would skyrocket. The entire bond market would be thrown into chaos when the single largest lender on the planet, long considered one of the safest, defaulted.

 

Apparently there is a certain American politician who would have no problem with a default although I guess it shouldn't be surprising since he did do multiple times when he was a private sector CEO.
Trump plays down consequences of a US default: 'Could be maybe nothing'
Trump Says Republicans Should Let the U.S. Default. What Would Happen Next.
When he ran for president the first time.
Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less (Published 2016)

Waiting for responses to the effect that I'm inflicted with TDS or that the former president with the orange complexion is living rent free in my brain.

 

Define default.

 

Bond holders include other countries, banks and individual investors. Just a straight up declaration that they will pay no further debt obligations would lead to a catastrophic financial collapse.

 

You've got to be more specific ... is this intentional like with the debt ceiling and "normal" politics (where we could pay its just procedural stupidity)? Is there a financial meltdown? Civil war has broken out? The government has collapsed?

 

I wonder if they would take it to the Supreme Court (or maybe some other international court?) like what American financial interests did with Argentina. You kind of have to ask how this happens and what the plan is after. Like if we are still going to be a country, some people are going to want to get paid if the idea is restructure debt or whatever.

 

The question becomes is this a temporary ceasing of payments or permanent? The result would be that the value of existing bonds would drop, a lot, interest rates would skyrocket. Banks would collapse because banks and financial institutions hold a lot of bonds. Pensions would go bust. 401k value would plummet. The economy would crash.

 

There is language in the constitution that says something to the effect that we can’t default, although not as explicitly as that.