[Samseau]

(09-16-2013 03:55 PM)TheKantian Wrote:  

(09-16-2013 03:17 PM)Samseau Wrote:  

Russia controlled it's own currency, went bankrupt

Mexcio controlled it's own currency, went bankrupt

100's other other examples

https://en.wikipedia.org/wiki/List_of_so...n_defaults

Of course, a country can go bankrupt if they choose not to pay. Just like a person can starve to death in an empty room if they refuse to open the door and leave.

When I state it's own currency, I'm also talking about debt issued in that currency. Once a country has debt in foreign denominations it's off because they cannot control that currency.

However, I understand politically why it's being invoked, because it's a good justification if you want to substantially reduce or eliminate welfare programs.

I'm afraid you don't know how bond markets work. Governments do not choose whether or not they pay. They always pay if they can, and if they cannot because they are broke, then they go bankrupt.

What usually happens is the government devalues their currency so they can pay off old bills.

A 20 trillion bill is easy to pay when you devalue your dollar by 50% or more.