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State defaults in the United States are instances of states within the United States defaulting on their debt. The last instance of such a default took place during the Great Depression, in 1933, when the state of Arkansas defaulted on its highway bonds, which had long-lasting consequences for the state. [1]
The years from 1834 to 1837 leading up to the State defaults were inflationary until the Panic of 1837. Prices for cotton and other exports sent overseas were rising. Through trade and state-backed bonds, the United States had a strong inflow of capital from the Bank of England and other European parties. Large infrastructure investments were ...
If the individual citizen or corporate citizen is a creditor of the state (e.g. government bonds), then a default by the state can mean a devaluation of their monetary wealth. In addition, the following scenarios can occur in a debtor state from a sovereign default: a banking crisis, as banks have to make write downs on credits given to the state.
[b] Investors were concerned that Puerto Rico would eventually default on its debt. [c] Such a default would reduce Puerto Rico's ability to issue bonds in the future. Puerto Rico currently states that it is unable to maintain its current operations unless it takes drastic measures that may lead to civil unrest.
Congress fails to reach agreement with President Clinton on the budget, resulting in the United States federal government shutdowns of 1995–1996; Republicans also threaten not to raise the debt ceiling 2011: 2011 United States debt-ceiling crisis: 2013: 2013 United States debt-ceiling crisis: 2023: 2023 United States debt-ceiling crisis
“Extraordinary measures” will be needed to keep the US from defaulting on its obligations if the nation’s debt ceiling isn’t raised or suspended by mid-January, Treasury Secretary Janet ...
The principal argument for investors to hold U.S. government bonds is that the bonds are exempt from state and local taxes. The bonds are sold through an auction system by the government. The bonds are buying and selling on the secondary market, the financial market in which financial instruments such as stock, bond, option and futures are traded.
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