The U.S.government need never default on its debt because
A)it can easily nationalize banks, who own all the debt, and then owe it to itself.
B)it can raise the funds it needs to repay by taxation, and it can print money to repay.
C)it owes the debt to itself, and it can always ignore a demand for repayment.
D)it can simply reduce spending enough to generate funds to repay its debt.

Question

Quizplus · Accepted Answer

The U.S. government can raise the funds it needs to repay its debt by taxation and also has the ability to print money. This means that the government has the means to repay its debts, and so default is not necessary. Other options may also be available, such as reducing spending, but taxation and printing money are likely to be the primary methods used to ensure repayment. Neither A nor C are accurate, as the government does not owe all of its debt to itself and cannot simply ignore a demand for repayment. D may also be an option, but it is less certain and may be more difficult to implement than taxation or printing money.

The USGovernment Need Never Default on Its Debt Because