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[quote=Anonymous][quote=Anonymous]
Every time they argue over raising the debt ceiling they say "we don't want to default on the debt" they never say " we don't want to cut government to pay the bondholders"

That's literally admitting that paying back bondholders is the last budget priority. This is on top of already defaulting by paying back bondholders a fraction of their initial investments using deflated dollars.

What kind of idiot would buy and hold US bonds?[/quote] You have it backwards, bondholders are first priority, that is why the government “shuts down”, they can’t continue new/current spending. Interest would paid first.

What you fail realize is that banks hold US gov bonds as their Tier 1 capital, it backstops their balance sheet against their riskier private loans. If US bonds default then the entire banking system would collapse. The US government obviously doesn’t want that, and neither do foreign countries and foreign banks, who hold the same US bonds as their Tier 1 capital.

Like it or not, the entire world is all in on US government debt.Its just a matter at what interest rate. For all the complaining, 4.5-5% is about average for the 10 yr, if you look back far enough.
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