Why the United States Cannot Technically Default on Its Debt

The concept of the United States defaulting on its debt is a myth perpetuated by political discussions and media.

The Legal Framework

The ability of the United States to default on its debt is governed by the 14th Amendment, specifically Section 4, which states:

“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

Despite the wording, there is a clear understanding that this clause does not allow for the federal government to disavow or default on its debt under any circumstances.

Consequences of Default

If the government encounters an inability to pay its debt, it would be compelled to take extraordinary measures such as:

Printing new money Raising taxes Reducing spending in other areas to prioritize debt payments

These actions would be employed to ensure the debt obligations are met, thus eliminating the need for default.

Politician Misrepresentation

Politicians often use the threat of debt default as a scare tactic in debates, particularly when discussing the debt ceiling, which is the limit on the total amount of money the government is authorized to borrow.

However, it is important to note that the real reason for continually raising the debt ceiling is to sustain ongoing spending rather than to address existing debts.

Fiscal Reality

The U.S. Treasury currently collects about $4 trillion per year in various tax revenues. Even with rising interest rates, this amount is sufficient to cover debt service obligations, which include:

Interest payments on the national debt (approximately $400 billion in 2022) Defense budget Entitlement programs

With current tax revenue, the government can comfortably afford to pay debts, the military budget, and other entitlements without any additional spending beyond the current tax collection.

The Impact of Scare Tactics

Political rhetoric often plays on fear to garner attention and support for policy agendas. Phrases such as “driving up inflation” or “prosecuting parents that disagree with our LGBTQ agenda” are less effective than the more sensational “default on debt payments.”

As a result, the message of debt default becomes the dominant narrative in political discourse, overshadowing the more nuanced truths behind fiscal management and the actual necessity of the debt ceiling.