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What would happen if America defaulted on its debt?
Sure we know it would be bad, but what do all of these scary numbers really mean?
- At the press time, the value was $21.7 trillion dollars.
- Lots of people know that a default would be bad, but not everybody seems to get how horrible it would be.
- While the risk is low, knowing what would happen if a default did occur is important information for all voters.
The United States government has a lot of debt. I mean a ton of it. At the time of writing, the value was 21.7 trillion dollars and climbing. This comes out to roughly 66,000 dollars per citizen. While the debt to GDP ratio today is not quite so high as it was after WWII, it is still at the unsettlingly high level of 105 percent. If the debt were visualized as a stack of one-thousand-dollar bills, it would be more than 1400 miles high. In single dollar bills, it would extend past the moon.
All of these statistics are pretty dry though. The numbers are too large to have any meaning, the percentages and ratios too arcane to prompt a reaction. Catastrophic scenarios like the government defaulting on its debt are described so abstractly that the gravity of the situation is obscured.
To make up for this, we'll look at what would happen if the United States was unable or unwilling to pay its debt from five different perspectives, starting with the world of international finance and ending with the prices at the grocery store.
What would happen if the United States Government defaulted on its debt?
Before we begin, it is important to mention that while many countries have defaulted on their national debts before, no country so influential, so thoroughly integrated with the global economy has ever gone bust. This means that while we can look to the past for evidence, there are variables in this case with no analogs elsewhere.
So, while nobody knows for sure what would happen, we can make educated guesses and predictions using the data we have. Take these predictions with a little salt, but not too much.
The first blows would come to the world of global finance. Investors and governments around the globe purchase U.S. government bonds. There are lots of them available to buy, and they are currently a very safe bet. While you won't make much money on them, you are sure about getting payment at a later date.
According to former Treasury Secretary Timothy Geithner in a letter he sent Congress in 2011, a U.S. government default would cause interest rates to spike all over the world. This is because treasury bonds "represent the benchmark borrowing rate" and anything that causes them to become a less certain investment will affect the entire financial system.
The interest rates on the bonds would go up, as investors would no longer be as sure of future payment. This would send up rates on everything else and increase costs for everything from government borrowing to your car loan. The cost of doing business would go up, threatening jobs and economic growth.
If the government defaulted and either refused to pay interest or declared it would pay bonds back at a fraction of the face value, lots of bondholders would be in trouble. The sudden realization that the full repayment of these bonds was unlikely would probably lead to a stampede to unload them on anybody who would take them.
Any organization that holds lots of these securities, such as banks, pension funds, or the government of Japan, would also be in trouble; since trillions of dollars in what were previously safe assets would then be worth a fraction of their face value. Banks would suddenly become very miserly with their money and less likely to lend. Some institutions would likely find themselves suddenly in the red.
Global stocks would likely fall as well, as occurred during the 2011 debt ceiling crisis. In that case, the Dow dropped 200 points the day after the S&P changed its outlook on U.S. debt. Imagine what it would look like if something actually happened!
The U.S. Economy
It gets worse. Investors would likely pull their money out of U.S. stocks and put them into safer stocks abroad since the rising cost of business in the U.S. would make companies less profitable. This, combined with the global effects mentioned above, would likely spark a recession.
This capital flight is exactly what happened to Russia and Argentina when they defaulted, though both economies bounced back fairly quickly.
Unlike with those examples, however, the US economy is so large and connected with the rest of the world that it would probably drag everybody else down with it. A taste of this was seen in 2011 during the debt ceiling crisis when other countries' stock markets fell in response to the chance of the U.S. not paying its bills.
People holding government debt
Despite what fearmongers might tell you, less than half of the national debt is owed to foreign governments. More than half of the total amount is owed to the federal reserve, mutual funds, public and private pension plans, insurance companies, banks, and the holders of savings bonds. All of these institutions would suddenly find themselves a lot worse off than they were the day before a default.
If the government defaulted, the people hurt the most would be retired people and anybody who hopes to retire, as the value of a large number of pension funds would fall as their assets decrease in value. Also, since the U.S. government owes the social security fund 3 trillion dollars, there will be a nice crisis on where social security money is going to come from to worry about too.
The disruption to daily life
If the likely stock market crash and increased cost of doing business described above weren't enough, Timothy Geithner, former Secretary of the Treasury, also pointed out in his letter to Congress that the U.S. government would also have to stop paying salaries to soldiers and officials. Social Security, student loan, and Medicare payments would end once the money ran out. Money for keeping government offices open would dry up.
Essential services, which stay open during a mere government shutdown, would likely cease.This reduction in government spending would cause many businesses not to make sales or receive payment, leading to layoffs.
The effect on consumers and the working stiff
As you might have guessed, a sudden increase in unemployment is likely to follow a default. Even if you were still getting a paycheck, don't hold bonds or owe money on loans, have a safe pension fund, and dodged the effects of a stock market crash: the inflation caused by a default would affect you.
This would mean higher prices for you at the gas station, grocery store, and at the mall; especially on imported goods. Any money you have saved away will begin to lose its value since the inflation rate will be well above the interest rate the bank is paying you. So you'll not only be paying more out of your paycheck, but your savings will be worth less and less each time you have to dig into them to pay the bills.
In Argentina, which defaulted in December 2001, inflation spiked after the government announced it couldn't pay its debt as capital fled the country and people lost faith in the currency. This caused prices to rise on all staple products; making life even more difficult for those left unemployed by the conditions leading to the default and causing the poverty rate to rise quickly.
How likely is any of this?
The risk of the United States government defaulting on its debt as a result of having too much of it is incredibly low. Alan Greenspan, the former chairman of the Federal Reserve, argued that it would never be necessary in any circumstance. In 2011 he reminded everybody that the United States borrows funds in money it controls the supply of, and therefore,
"The United States can pay any debt it has because we can always print money to do that. So, there is zero probability of default"
Of course, there is always the problem of the U.S. just deciding to not pay its bills for the sake of a political stunt.
The United States did get a credit down rating in 2011 as a result of Congress debating whether or not to pay the bills, but while the effects can be compared to a default, it wasn't one. Similarly, the government forgot to pay a $122-million-dollar bill in 1979, but that was only on a relatively small amount. Even that raised the cost of borrowing for everybody, however. The country also technically defaulted in 1790 and 1933 without an apocalypse occurring.
While the United States is unlikely to default on its debt, the possibility is always present. The effects of such an economic catastrophe can be difficult to imagine, but an understanding of what could happen if we aren't careful is vital.
 For those of you who are screaming "Hyperinflation" right now, chill out. Hyperinflation tends to happen in countries without a robust economic base, and utter buffoons were managing their economies. The U.S. is fine for the foreseeable future.
So much for rest in peace.
- Australian scientists found that bodies kept moving for 17 months after being pronounced dead.
- Researchers used photography capture technology in 30-minute intervals every day to capture the movement.
- This study could help better identify time of death.
We're learning more new things about death everyday. Much has been said and theorized about the great divide between life and the Great Beyond. While everyone and every culture has their own philosophies and unique ideas on the subject, we're beginning to learn a lot of new scientific facts about the deceased corporeal form.
An Australian scientist has found that human bodies move for more than a year after being pronounced dead. These findings could have implications for fields as diverse as pathology to criminology.
Dead bodies keep moving
Researcher Alyson Wilson studied and photographed the movements of corpses over a 17 month timeframe. She recently told Agence France Presse about the shocking details of her discovery.
Reportedly, she and her team focused a camera for 17 months at the Australian Facility for Taphonomic Experimental Research (AFTER), taking images of a corpse every 30 minutes during the day. For the entire 17 month duration, the corpse continually moved.
"What we found was that the arms were significantly moving, so that arms that started off down beside the body ended up out to the side of the body," Wilson said.
The researchers mostly expected some kind of movement during the very early stages of decomposition, but Wilson further explained that their continual movement completely surprised the team:
"We think the movements relate to the process of decomposition, as the body mummifies and the ligaments dry out."
During one of the studies, arms that had been next to the body eventually ended up akimbo on their side.
The team's subject was one of the bodies stored at the "body farm," which sits on the outskirts of Sydney. (Wilson took a flight every month to check in on the cadaver.)Her findings were recently published in the journal, Forensic Science International: Synergy.
Implications of the study
The researchers believe that understanding these after death movements and decomposition rate could help better estimate the time of death. Police for example could benefit from this as they'd be able to give a timeframe to missing persons and link that up with an unidentified corpse. According to the team:
"Understanding decomposition rates for a human donor in the Australian environment is important for police, forensic anthropologists, and pathologists for the estimation of PMI to assist with the identification of unknown victims, as well as the investigation of criminal activity."
While scientists haven't found any evidence of necromancy. . . the discovery remains a curious new understanding about what happens with the body after we die.
The distances between the stars are so vast that they can make your brain melt. Take for example the Voyager 1 probe, which has been traveling at 35,000 miles per hour for more than 40 years and was the first human object to cross into interstellar space. That sounds wonderful except, at its current speed, it will still take another 40,000 years to cross the typical distance between stars.
Worse still, if you are thinking about interstellar travel, nature provides a hard limit on acceleration and speed. As Einstein showed, it's impossible to accelerate any massive object beyond the speed of light. Since the galaxy is more than 100,000 light-years across, if you are traveling at less than light speed, then most interstellar distances would take more than a human lifetime to cross. If the known laws of physics hold, then it seems a galaxy-spanning human civilization is impossible.
Unless of course you can build a warp drive.
Ah, the warp drive, that darling of science fiction plot devices. So, what about a warp drive? Is that even a really a thing?
Let's start with the "warping" part of a warp drive. Without doubt, Albert Einstein's theory of general relativity ("GR") represents space and time as a 4-dimensional "fabric" that can be stretched and bent and folded. Gravity waves, representing ripples in the fabric of spacetime, have now been directly observed. So, yes spacetime can be warped. The warping part of a warp drive usually means distorting the shape of spacetime so that two distant locations can be brought close together — and you somehow "jump" between them.
This was a basic idea in science fiction long before Star Trek popularized the name "warp drive." But until 1994, it had remained science fiction, meaning there was no science behind it. That year, Miguel Alcubierre wrote down a solution to the basic equations of GR that represented a region that compressed spacetime ahead of it and expanded spacetime behind to create a kind of traveling warp bubble. This was really good news for warp drive fans.
The problems with a warp drive
There were some problems though. Most important was that this "Alcubierre drive" required lots of "exotic matter" or "negative energy" to work. Unfortunately, there's no such thing. These are things theorists dreamed up to stick into the GR equations in order to do cool things like make stable open wormholes or functioning warp drives.
It's also noteworthy that researchers have raised other concerns about an Alcubierre drive — like how it would violate quantum mechanics or how when you arrived at your destination it would destroy everything in front of the ship in an apocalyptic flash of radiation.
Warp drives: A new hope
Credit: Primada / 420366373 via Adobe Stock
Recently, however, there seemed to be good news on the warp drive front with the publication this April of a new paper by Alexey Bobrick and Gianni Martre entitled "Introducing Physical Warp Drives." The good thing about the Bobrick and Martre paper was it was extremely clear about the meaning of a warp drive.
Understanding the equations of GR means understanding what's on either side of the equals sign. On one side, there is the shape of spacetime, and on the other, there is the configuration of matter-energy. The traditional route with these equations is to start with a configuration of matter-energy and see what shape of spacetime it produces. But you can also go the other way around and assume the shape of spacetime you want (like a warp bubble) and determine what kind of configuration of matter-energy you will need (even if that matter-energy is the dream stuff of negative energy).
Warp drives are simpler and much less mysterious objects than the broader literature has suggested.
What Bobrick and Martre did was step back and look at the problem more generally. They showed how all warp drives were composed of three regions: an interior spacetime called the passenger space; a shell of material, with either positive or negative energy, called the warping region; and an outside that, far enough away, looks like normal unwarped spacetime. In this way they could see exactly what was and was not possible for any kind of warp drive. (Watch this lovely explainer by Sabine Hossenfelder for more details). They even showed that you could use good old normal matter to create a warp drive that, while it moved slower than light speed, produced a passenger area where time flowed at a different rate than in the outside spacetime. So even though it was a sub-light speed device, it was still an actual warp drive that could use normal matter.
That was the good news.
The bad news was this clear vision also showed them a real problem with the "drive" part of the Alcubierre drive. First of all, it still needed negative energy to work, so that bummer remains. But worse, Bobrick and Martre reaffirmed a basic understanding of relativity and saw that there was no way to accelerate an Alcubierre drive past light speed. Sure, you could just assume that you started with something moving faster than light, and the Alcubierre drive with its negative energy shell would make sense. But crossing the speed of light barrier was still prohibited.
So, in the end, the Star Trek version of the warp drive is still not a thing. I know this may bum you out if you were hoping to build that version of the Enterprise sometime soon (as I was). But don't be too despondent. The Bobrick and Martre paper really did make headway. As the authors put it in the end:
"One of the main conclusions of our study is that warp drives are simpler and much less mysterious objects than the broader literature has suggested"
That really is progress.
The Black Death wasn't the only plague in the 1300s.
- In a unique study, researchers have determined how many people in medieval England had bunions
- A fashion trend towards pointed toe shoes made the affliction common.
- Even monks got in on the trend, much to their discomfort later in life.
Late Medieval England had its share of problems. The Wars of Roses raged, the Black Death killed off large parts of the population, and passing ruffians could say "Ni" at will to old ladies.
To make matters worse, a first of its kind study published in the International Journal of Paleopathology has demonstrated that much of the population suffered from another plague — a plague of bunions likely caused by a ridiculous medieval fashion trend.
If the shoe fits, it won't cause bunions
The outlines of a leather shoe from the King's Ditch, Cambridge. It is easy to see how these shoes might be constricting. Copyright Cambridge Archaeological Unit.
The bunion, known to medicine as "hallux valgus," is a deformity of the joint connecting the big toe to the rest of the foot. It is painful and can cause other issues including poor balance. The condition is associated with having worn constrictive shoes for a long period of time as well as genetic factors. Today, it is often caused by wearing high heeled shoes.
The medieval English didn't care for high heeled shoes as much as modern fashionistas, but there was a major fashion trend toward shoes with long, pointed toes called "poulaines" or "crakows" for their supposed place of origin, Krakow, Poland.
This trend, already silly-looking to a modern observer, got out of hand in a hurry. According to some records, the points on nobleman's shoes could be so long as to require tying them to the leg with string so the wearer could walk. At one point, King Edward IV had to ban commoners from wearing points longer than two inches. A couple years later, he saw fit to ban the shoes altogether.
But, just knowing that people back in the day made poor fashion choices doesn't prove they suffered for it. That is where digging up old skeletons to look at their feet comes in.
Beauty is pain: the price of high medieval fashion
To learn how bad the bunion epidemic was, the researchers looked to four burial sites in and around Cambridge. One was a rural cemetery where poor peasants were buried. Another was the All Saints by the Castle parish, which had a mixed collection of people that tended toward poverty. The Hospital of St. John's burial ground contained both the poor charges of a charity hospital and wealthy benefactors. Lastly, they considered the cemetery of a local Augustinian friary, home to monks and well-to-do philanthropists.
The team considered 177 adult skeletons that were at least a quarter complete and still had enough of their feet to make studying them possible. The remains were classified by age and sex by observation and DNA testing. Each was examined for evidence of bunions and signs of complications from the condition, such as falling.
Those buried in the monastery's graveyard were the most affected. Nearly half, 43 percent, of the remains found there had bunions. This includes five of the eleven members of the clergy they found. Twenty-three percent of those laid to rest at the Hospital of St. John had bunions, though only 10 percent of those at the All Saints by the Castle parish graveyard did.
The rural cemetery had a much lower rate of instances, only three percent, suggesting that these peasants were able to avoid at least one plague.
Overall, eighteen percent of the individuals examined had bunions, with men more likely to have them than women. Those at cemeteries known for exclusivity were more likely to have them as well, though it is clear that the condition also affected members of other classes. This makes sense, as it is known that these shoes had mass appeal.
The authors note that the rural cemetery having fewer cases is partly because that cemetery "went out of use prior to the wide adoption of pointed shoes, and it is likely that those residing in the parish predominately wore soft leather shoes, or possibly went barefoot."
Those skeletons with evidence of bunions were more likely to have fractures indicative of a fall. This was more common on those estimated or recorded as having lived past age 45.
In our much more enlightened times, 23 percent of the population currently endures having bunions, most of them women, and one of the leading culprits behind this is the high heeled shoe.
Some things never change.