Scholarly Comments on Academic Economics

How and Why a U.S. Sovereign Debt Crisis Could Occur


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A U.S. sovereign debt crisis is a remote possibility, but in our increasingly fragile system it could be triggered by a number of financial catastrophes—​from a chaotic break-up of the Euro system to something as adventitious as a serious earthquake in California. The most likely source of a U.S. sovereign debt crisis, however, is a failure of the U.S. political system to address the growth of the major entitlement programs—Social Security, Medicare and Medicaid. That possibility is discussed in this paper.

Podcast related to this article: EJW-Mercatus Symposium Contributors On a Potential U.S. Debt Crisis (EJW Audio, January 2012).