How and why a U.S. sovereign debt crisis could occur

mjb/Flickr

Debt protesters

Article Highlights

  • If current policies are followed, the debt will reach 82% of the #GDP by 2021, largely caused by #entitlements

    Tweet This

  • The #US is on an unsustainable path #debt

    Tweet This

  • US must choose between a stable dollar or fulfilling promised #entitlements

    Tweet This

How and why a U.S. sovereign debt crisis could occur

Download PDF

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. 

Peter J. Wallison is a Arthur F. Burns Fellow in Financial Policy Studies.



Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Peter J.
Wallison

What's new on AEI

Holder will regret his refusal to obey the Constitution
image 'Flood Wall Street' climate protesters take aim at their corporate allies
image 3 opportunities for better US-India defense ties
image Is Nicolás Maduro Latin America's new man at the United Nations?
AEI on Facebook
Events Calendar
  • 29
    MON
  • 30
    TUE
  • 01
    WED
  • 02
    THU
  • 03
    FRI
Thursday, October 02, 2014 | 9:00 a.m. – 10:30 a.m.
Campbell Brown talks teacher tenure

We welcome you to join us as Brown shares her perspective on the role of the courts in seeking educational justice and advocating for continued reform.

Friday, October 03, 2014 | 12:00 p.m. – 1:00 p.m.
Harnessing the power of markets to tackle global poverty: A conversation with Jacqueline Novogratz

AEI welcomes you to this Philanthropic Freedom Project event, in which Novogratz will describe her work investing in early-stage enterprises, what she has learned at the helm of Acumen, and the role entrepreneurship can play in the fight against global poverty.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.