what happens if america defaults?

  1. 113 Posts.
    In 1975 when the Australian Government was unable to pay
    its bills, and was about to lay off public servants due to the
    Liberal Senate delaying but not denying (as that would be
    unconstitutional) money supply bills passed by the Labor
    House of Reps, the Governor-General prorogued the
    Parliament and called a Federal Election.

    No matter what anybody may think of John Kerr
    there is nothing undemocratic about solving a
    national crisis by asking the people to vote.

    It was inconvenient for Whitlam, but Kerr had
    conformed with Section 28 of the Constitution:
    "Every House of Representatives shall continue
    for three years from the first meeting of the
    House, and no longer, but may be sooner
    dissolved by the Governor-General.

    It was only a convention (not mandated
    under the Constitution) that the PM be
    consulted before an election was held.

    America doesn't have a Governor-General to step in
    to resolve a money supply deadlock, which means if
    the Republicans bring on a default and an election
    is inconvenient for Obama and the Democrats,
    below is the last two paragraphs from today's
    Financial Review article that was called:

    "Default would kill credit":

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