If Obamacare fails, then what?

[Mr Khan]

SlayerRondo said:

Mr Khan said:

SlayerRondo said:

 

A measure of a countrys federal debt in relation to its gross domestic product (GDP). By comparing what a country owes to what it produces, the debt- to - GDP ratio indicates the country's ability to pay back its debt.

If a nation cannot make payment of the debt then they will default. Therefore the higher the debt to GDP ratio the greater the likely hood that the nation will default. This is what happened to Greece and forced them to beg the EU for bailouts twice. If America defaults there is no one capable or willing to bail us out and therefore I believe it is critical that we avoid this happening.

Greece does not control its own currency. There's a large difference.

Yes their is a large difference. We can print our own money at whatever rate we decide given that our currency is no longer bound to the value of gold. However this leads to inflation and inflation leads to uncertainty and that makes people less likely to buy US bonds or hold on too their currency which will decrease the value of the currency further.

That's the beauty of it, however. Inflation only leads to uncertainty when it leads to uncertainty. The liquidity trap sorts all of that out for the moment.

Japan demonstrates that America's nowhere near the danger zone, especially since the US doesn't have Japan's demographic problems which mess with the tax base.