U.S. May Join 1933 Germany in Pantheon of Deadbeat Defaults
http://www.bloomberg.com/news/2013-10-13/u-s-risks-joining-1933-germany-in-pantheon-of-deadbeat-defaults.html
Reneging on its debt obligations would make the U.S. the first major Western government to default since Nazi Germany 80 years ago.
Germany unilaterally ceased payments on long-term borrowings on May 6, 1933, three months after Adolf Hitler was installed as Chancellor. The default helped cement Hitlers power base following years of political instability as the Weimar Republic struggled with its crushing debts.
These are generally catastrophic economic events, said Professor Eugene N. White, an economics historian at Rutgers University in New Brunswick, New Jersey. There is no happy ending.
The debt reparations piled onto Germany, which in 1913 was the worlds third-biggest economy, sparked the hyperinflation, borrowings and political deadlock that brought the Nazis to power, and the default. It shows how excessive debt has capricious results, such as the civil war and despotism that ravaged Florence after Englands Edward III refused to pay his obligations from the city-states banks in 1339, and the Revolution of 1789 that followed the French Crowns defaults in 1770 and 1788.