An Act of War

America defaulting on its debt would have been an act of war. The world would have judged against the future generations of Americans, and that judgement would have been war.

There were many debt deniers in the political environment who said that the US had enough money coming in to pay the interest on our debt.

But what these debt deniers didn’t understand, our ability to use that money depends on sovereign nations accepting the dollar, and accepting it mostly freely. The act of George W. Bush dumping 9 billion of US dollars on the Iraqi economy at the start of the Iraqi War was not a wasted act. The act of dumping money made the use of the dollar in the Middle East something that many wanted, and will be for some time.

On the other hand, the US has a war machine that could be used to make a sovereign nation take our money, but not the world.

But the first act for Obama, after the House let our debt default, would still have been to introduce a Large Wars Powers Act to the same Congress.

Most likely things would have gotten worst on the second day.

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