You see its basic banking principal, if you know the person your loaning to can't pay back the money you have already lent to them, you stop lending. Forget about the United Socialist States of America, I say we will become the United Peoples Republic of America.This is critical question, because resistance on the part of creditors will drive up interest rates, clobbering the housing market and demolishing the value of whatever cash savings Americans have left. The other answer--our government lending the money
to itself--will destroy the value of the dollar, and that wouldn't help too many people, either (except debtors--it would help debtors because they will be able to repay nominal debts with toilet-paper dollars.
Uh Oh: China Doesn't Want To Lend Us Money Anymore