[a3w]

A little to coarse, since OP asked about the UK. But Obama already acknowledged that the US will never pay back all their debt, "even if they get 10% GDP increase per year for every single year" if I am not mistaken about that non-verbatim quote.

[ceejayoz]

Not paying off all the debt and defaulting on debt are vastly different things.

[roenxi]

Are you potentially not a creditor? I think the term here is 'distinction without a difference'. If you lend the US enough money for a sandwich, you should expect not to get a sandwichworth of money back. What you call that legally is not that interesting, I suspect, to the people were lending the money.

[ceejayoz]

The creditors all get paid. The US has always made its debt payments.

New loans get taken out while that happens.

Non-$0 debt load, but no defaults. The only time the US ever paid off “all its debt” was during 1835-1836. One year out of more than 200.

[roenxi]

It doesn't matter what happened to creditors centuries ago. As it stands right now it is inconceivable that the US could or will pay off all its present and future creditors in real terms. Someone has lost a lot of money (presumably China and Japan). How could the US pay them back without resorting to fantasy? The debts are too high and the US economy is not big enough for any strategy to be politically feasible. Even coming up with a serious scenario where the US tries to pay down its debts is hard. It is likely that they are going to keep running up debts until they can't pay the interest any more, then default.

The best outcome the US can achieve is semantic games where they pretend that giving people back less than was borrowed is somehow reasonable.

[ceejayoz]

The debt-to-GDP ratio the US currently carries has been seen before. The raw number is high, but so is the GDP.

$1M in credit card debt would sink me. For Jeff Bezos, it doesn’t even rise to his personal attention.

> Someone has lost a lot of money (presumably China and Japan). How could the US pay them back without resorting to fantasy?

I can’t pay my mortgage in full right now. That doesn’t mean my bank loses money on the loan.

China and Japan are getting paid on their loans, at the agreed upon amounts. They will continue to be paid.

[roenxi]

> The debt-to-GDP ratio the US currently carries has been seen before.

In the middle of a world war, facing a level of emergency that left civilisations of more than one continent shattered and reordered the world as it was known. As an emergency spike that lasted for around 5 years before they started paying people back. And although the debt was staggering and the US economy was in its prime as a global manufacturing superpower.

This is obviously different, the US government has just been spending because they can. If they even try to pay this debt off it'd be stupid. From the US perspective, why even bother? They're basically already committed.

> I can’t pay my mortgage in full right now. That doesn’t mean my bank loses money on the loan.

In that case you've defaulted on your mortgage. You may get on well with the US government.

And the bank may or may not be losing money for all I care, but on net the creditors to the US are clearly losing money. The numbers are too big for any other outcome.

[stephen_g]

Monetarily sovereign countries like the US, UK, Australia, Japan etc. (but not Euro using countries because they can’t control their own currency) don’t really have to. They can just keep rolling things over for as long as they want. If private markets don’t want to buy bonds (they will tend to though because it’s basically risk free), the central bank can.

It’s not the money that’s the issue - that’s an abstract, invented thing. The limits are inflation, natural resources and available labour.

[yuvadam]

That quote doesn't surprise me, politicians are stuck between a rock and a hard place without any real options to solve systemic issues. Just like with climate collapse, the solutions that tackle the problems at their core require what is effectively political suicide.

[ChuckNorris89]

Political suicide sounds far better than the economic and environmental suicide path we've been on for the past few decades in the name of lower costs and more profit.