The so-called US debt default means that the US federal government can't repay the principal and interest of the national debt according to the agreed time, which violates the agreement with the holder, so it is called US debt default. The reason why American debt default is so concerned is that the United States is the largest economy in the world, and the US dollar can be used as an international currency for foreign exchange reserves and settlement, and the international transaction prices such as gold and oil are linked to it.
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If the US debt defaults, the world economy will immediately enter the Great Depression. If the US debt ceiling is not raised and the Fed stops buying US bonds, then the US debt due will be classified as junk. At the same time, other local bonds and corporate bonds will also be downgraded, resulting in a heavier interest burden. American finance will be forced to cut spending, and high-income areas such as medical institutions and military enterprises will be significantly hit. ?
At the same time, the rising debt cost of American enterprises will force a large number of enterprises with high assets, high liabilities and low profits to lose money or go bankrupt. In addition, the pressure of debt cost will force American capital to return and replenish the capital of domestic enterprises. When the economy is in trouble, the nature of the world economy is worse than anyone else. ?
Baidu Encyclopedia-US Debt Default