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How and Why a U.S. Sovereign Debt Crisis Could Occur


  • Peter J. Wallison


A U.S. sovereign debt crisis is a remote possibility, but in our increasingly fragile system it could be triggered by a number of financial catastrophes—​from a chaotic break-up of the Euro system to something as adventitious as a serious earthquake in California. The most likely source of a U.S. sovereign debt crisis, however, is a failure of the U.S. political system to address the growth of the major entitlement programs—Social Security, Medicare and Medicaid. That possibility is discussed in this paper.

Suggested Citation

  • Peter J. Wallison, 2012. "How and Why a U.S. Sovereign Debt Crisis Could Occur," Econ Journal Watch, Econ Journal Watch, vol. 9(1), pages 71-77, January.
  • Handle: RePEc:ejw:journl:v:9:y:2012:i:1:p:71-77

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    References listed on IDEAS

    1. Ramirez Carlos D., 2011. "The $700 Billion Bailout: A Public-Choice Interpretation," Review of Law & Economics, De Gruyter, vol. 7(1), pages 291-318, November.
    2. Vaughn, Michael G. & Fu, Qiang & Wernet, Stephen J. & DeLisi, Matt & Beaver, Kevin M. & Perron, Brian E. & Howard, Matthew O., 2011. "Characteristics of abstainers from substance use and antisocial behavior in the United States," Journal of Criminal Justice, Elsevier, vol. 39(3), pages 212-217, May.
    3. Vaughn, Michael G. & DeLisi, Matt & Gunter, Tracy & Fu, Qiang & Beaver, Kevin M. & Perron, Brian E. & Howard, Matthew O., 2011. "The Severe 5%: A Latent Class Analysis of the Externalizing Behavior Spectrum in the United States," Journal of Criminal Justice, Elsevier, vol. 39(1), pages 75-80, January.
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    More about this item


    sovereign debt crisis; financial crisis;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt


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