The U.S. can handle its debt load today, but every other endangered sovereign debtor is working like mad to avoid a painful default.
In the run-up to Debt Ceiling D-Day on August 2, the United States faces a challenge that is familiar to countries around the world How do you manage your inflows and outflows to avoid defaulting on your debt? But there’s a crucial distinction. The U.S. can handle its debt load today (and then some) and its decision to default would be political — not to mention insane. Every other endangered sovereign debtor is working like mad to avoid a painful default.
Some aren’t doing so hot. Portugal’s credit rating was downgraded to junk by Moody’s. Meanwhile Greece is on the verge of a debt deal that some credit rating agencies might consider the equivalent of default. Who’s next?
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Source: Derek Thompson | The Atlantic