What happens if Trump decides to default on the debt?
Could this be how he stops the election, or stops the vote count?
Could this be how he stops the election, or stops the vote count?
Firing Jerome Powell and pushing rates lower, in spite of reality on the ground, is effectively a form of soft default. (That, plus the laundry list of other things, which is too long to fit into a single HN comment)
The US will never stop paying its obligations. But driving away investment by breaking promises abroad and eroding political stability at home very much will cause the trust in the USD as an ongoing institution to evaporate. Sure, the US still pays its bonds on time in USD, but what is USD worth when the US cannot honor its trade obligations, cannot honor its diplomatic obligations, cannot be relied on as a stable partner?
It will be very scary when the US stops being the dominant financial system. So much of the US political economy (and more fundamentally, our way of life) depends on it.
I am not saying it would be pretty or desirable, but by reading what happened to countries can give a notion.
It would eliminate the notion of the USD as the basis of foreign trade across the world, almost all of the finance system is supported by the USD being the safest investment available.
a) update the valuation of their assets, recognizing that they are instantly insolvent, cease trading, and lock their doors;
b) continue operating "illegally" in the hope that some sort of order will materialize
Option (a) causes all the non-cash economy in the US to stop functioning. The gold and silver bugs are, briefly, ecstatic - this is their moment. Everyone else who would rely on their debit or credit cards to buy food and gasoline, less so. The legal order that is supposed to maintain things like elections theoretically remains in place, but the rapid collapse in public order forces states to step in. You have elections to some thing called the "United States", but when most of its money has been rendered worthless, does it really exist any more? Essentially this is the "prepper" fantasy.
The Federal bits of the US being strong (and indeed all institutional strength) is not a law of nature, and people who think it is a law of nature are the most likely to blindly run it into the ground while fighting each other to wield that strength.
But right now, the Federal bits are stronger than any state.
His options are start a major war, default on the debt, ?
Hold onto your hats
Not that they started it or want it to continue, and not that I think Zelenski is anything other than a hero, but the case in point is Ukraine not holding elections since the war started.
When Zelenski told trump there have been no elections during the war trump, on camera, was delighted and said “very good”.
You castrate the media, and take control of major vehicles to tilt the balance in your favour in quasi-sham elections; accumulate power in the executive while keeping the remaining seats of power under the thumb of the branch: legislative gets installed with sycophants/acolytes, judiciary power is tamed/dimished and regime-adjacent judges installed.
If you play this well you keep getting elected when elections happen and slowly twists more the sword into all democratic institutions.
[0] https://www.journalofdemocracy.org/articles/the-new-competit...