Firing Jerome Powell and pushing rates lower, in spite of reality on the ground, is effectively a form of soft default. (That, plus the laundry list of other things, which is too long to fit into a single HN comment)
The US will never stop paying its obligations. But driving away investment by breaking promises abroad and eroding political stability at home very much will cause the trust in the USD as an ongoing institution to evaporate. Sure, the US still pays its bonds on time in USD, but what is USD worth when the US cannot honor its trade obligations, cannot honor its diplomatic obligations, cannot be relied on as a stable partner?
It will be very scary when the US stops being the dominant financial system. So much of the US political economy (and more fundamentally, our way of life) depends on it.
as long as the military is there there is no need to worry because who decides which debt gets paid who enforces this financial rule, who makes the rule by what power?
Defaulting on U.S. Treasury payments would cause a lot of economic stress around the globe. But so did the 2008 financial crisis and the 2020 COVID pandemic, and we held presidential elections both those years.
No one knows what would happen. That is unprecedented. There would be mayhem in financial systems as all types of collateral is vaporized. All types of on paper net worth would collapse towards zero
It's be unprecedented for the foundation of the contemporary financial system. Argentina defaulting on their debt is very different than a country which every other country, and their banks hold bonds from since it's deemed the safest investment possible.
It would eliminate the notion of the USD as the basis of foreign trade across the world, almost all of the finance system is supported by the USD being the safest investment available.
Certainly triggering a default at a critical time in the election would result in nothing else being on the news for the remaining few weeks of the fragmenting United States, until such time as CA and NY can get their own currencies circulating.
By the constitution states are not allowed to issue currency. Triggering a default would lead to devaluation of bonds and probably currency, but why would it stop elections?
If it gets to that point, the Federal govenrment will have ceased to operate as anything recognizable, and most of the finance industry is faced with two options:
a) update the valuation of their assets, recognizing that they are instantly insolvent, cease trading, and lock their doors;
b) continue operating "illegally" in the hope that some sort of order will materialize
Option (a) causes all the non-cash economy in the US to stop functioning. The gold and silver bugs are, briefly, ecstatic - this is their moment. Everyone else who would rely on their debit or credit cards to buy food and gasoline, less so. The legal order that is supposed to maintain things like elections theoretically remains in place, but the rapid collapse in public order forces states to step in. You have elections to some thing called the "United States", but when most of its money has been rendered worthless, does it really exist any more? Essentially this is the "prepper" fantasy.
Situational. Right now, the Federal bits are stronger than any state.
The Federal bits of the US being strong (and indeed all institutional strength) is not a law of nature, and people who think it is a law of nature are the most likely to blindly run it into the ground while fighting each other to wield that strength.
But right now, the Federal bits are stronger than any state.
Another option is the modern authoritarian model, Competitive Authoritarianism [0] as deployed by Órban, Putin, etc.
You castrate the media, and take control of major vehicles to tilt the balance in your favour in quasi-sham elections; accumulate power in the executive while keeping the remaining seats of power under the thumb of the branch: legislative gets installed with sycophants/acolytes, judiciary power is tamed/dimished and regime-adjacent judges installed.
If you play this well you keep getting elected when elections happen and slowly twists more the sword into all democratic institutions.
Neither defaulting on the debt or starting a major war are effective ways to hold on to power, sheesh. He already tried to hold on to power, so you could just look at how he tried last time, that's one of the typical strategies. The other main one is a military coup.
Creating a global crisis is an excellent way to hold onto power.
Not that they started it or want it to continue, and not that I think Zelenski is anything other than a hero, but the case in point is Ukraine not holding elections since the war started.
When Zelenski told trump there have been no elections during the war trump, on camera, was delighted and said “very good”.
Could this be how he stops the election, or stops the vote count?