What does it mean for a country to go bankrupt?

[vstephane]

What are the dire consequences? Can someone please explain this to me..

[bemildred]

1. I think it means they renege on some portion of their debts and obligations. nt

[Aqaba]

2. If its the USA bringing down the rest of the world with it?

[SammyWinstonJack]

6. DAMN!

:scared: I sometimes wonder how much better off the World would be if the "United States of America" had never been? :shrug:

[Amonester]

3. In technical speak, a country cannot go bankrupt.

Because, unless all of it citizens kind of 'vanish' or else... , there will always be someone left to pay and 're-acquire' the assets of 'the country' by doing so.

In Iceland, though, since it's such a 'small' population and a small island, unless tourism booms (which I doubt it will), not so certain.

[bhikkhu]

4. Referring to Iceland, it will be interesting to learn what happens

as it is a rare to unheard of occurrence in modern times. I imagine they will simply have to devalue the currency, as the government is the last resort of the debts the banks have entered into. I have read that the size of the bank debt is about ten times the size of the government's tax base, on a good day, so a revaluation netting 5 cents on the dollar (equivalent) for holders of the kroner may be expected.

After revaluation, the further consequences would be that trust is gone, and foreign investment goes with it. I don't see that as much of a dire consequence myself as it is all of little use except as an engine of economic and population growth, which is a wholly different thing from sustainable prosperity.

[barb162]

5. It means they cannot pay their near term obligations

just like a person or a company.

[nadinbrzezinski]

7. Sure since I have seen it in the flesh

your savings are not worth the paper they are printed on

Currency controls may come into place, where you are limited on how much you can use... or move across borders

You will see a massive devaluation of your currency... in this case the dollar, which will make any imported things go through the roof

Local, state and feds have no money for services or goods.

You may even call 9.11, and assuming you get a dispatcher, not get a police\ambulance since crews have been cut beyond bones

Did I mention hunger?

Perhaps starvation

It is ugly...

No jobs...

[ColbertWatcher]

8. It means more people will be needing help.

Like food banks (http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4206119&mesg_id=4206119), shelters, etc.

[LaPera]

9. Ask Argentina....The World Bank moves in steals your resources & extorts impossible monetary demands