For decades, when economists warned about a sovereign debt crisis, the usual suspects were Greece, Italy, Argentina — countries whose governments had borrowed beyond their means. The next one may look rather different. It may begin in the United States.
That sounds almost absurd. America issues the world’s reserve currency. US Treasury bonds are the ultimate safe asset. The dollar dominates international trade and finance, and Washington borrows in its own currency. None of that repeals the laws of arithmetic, though.