Can they just ignore the debt like it never existed? Are there real reprucussions for the government or impacts to the econony?
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the most immediate impact is the collapse of the bonds market, anyone that owns Treasury bonds would lose their money and as treasury bonds are generally seen as the Most safe investment to make, the loss of faith here will likely cause the rest of the markets to panic because of all “people” the government was the one person you dont want to skip no their obligations.
after that it depends on who loaned who. 1st off no other foreign or private investor would provide you a loan so incurring more debt is out of the question, as no one will buy this.
if its serious enough a nation might find their foreign assets seized to consolidate the debt. now the question here is if a nation would survive having this done to them or if it would instead park conflict.
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