Please do not get neo-patriotical on me.
Hypothetically: If the USA was going to go bankrupt; what would happen to people with Federal government pensions? Would they have the best rights of any debt holder in the event of liquidation?
Neo-Patriotic*
Net Advisor:
Is that similar to what Russia did after the soviet union collapsed?
Or after Nazi germany?
Since the largest pension receivers are Congress and senators and their families, you don't think they are going to do without, do you?
Hypothetically speaking, the dollar and stock market would crash. The Great Depression would be like comparing an E Ticket Attraction at Disneyland.
Global war for resources would immediately breakout. I have written in depth on this hypothetical question.
Ask yourself this question. Why does the US gov plant war ships and military around the world to protect what?
A: We are located (militarily) in areas that are vital economic and political interests of the USA and our allies. We want to insure that these RESOURCES are not disrupted in any way and have war ships, etc to protect such interests. Smart move huh?
In practice, the likelihood is it would not happen. The US can just devalue its currency and print more money.
===========02.17.2010 edit/ followup:==============
Yes, this is EXACTLY what Russia did in 1998 and is still doing.
The result of Russia's devaluation in 1989 caused:
the collapse of LTCM (Long Term Capital Management);
the FED (under FED Chair, Alan Greenspan) to bailout Wall Street banks by quickly lowering interest rates.
sent the U.S. stock market tanking in the AM (Sept 1998) on the news.
10 years later — same problems in Russia
09-17-2008
«Behind the Russian Stock Market Meltdown»
11-10-2008
"Ruble Devaluation Looms on Oil; Troika Sees 30% Drop "
12-15-2008
"Russia Devalues the Ruble for a 2nd Time in a Week "
01-01-2009
«Russia devalues ruble for 13th time in two months»
I don't follow the German market (DAX Index) that closely except for a few companies. I have not looked at WWII period economically for Germany.
If the U.S. continues its debt situation as foretasted, and China is selling U.S. Treasuries, who is going to be there to buy U.S. debt? How is Congress going to finance their deficits?
02-17-2010
«China loses some of its taste for U.S. Treasuries»
Solution: Higher taxes, higher interest rates (inflation) and then devaluation of U.S. Dollar. Not a good economic mix.
08.13.2009
«Why Higher Interest Rates is a Bad Move for the FED and the Economy Right Now»