what would a default look like?....would that ever happen here?
People and countries (like China) with savings in US government bonds would see them wiped out. It would be an extremely unpopular thing to do because those who have most of their saving in cash or bonds would see their savings wiped out over night, pensions would also be devastated, and you would see violent protests from those affected, and there would be political consequences, at home and abroad. In addition, it would be virtually impossible for the government to borrow money again any time soon without paying a usurious amount of interest (although this may be a good thing in the long run). Several countries, like Argentina, have defaulted before, but an EU country doing so would send shockwaves around the world, if the US did it, as the producer of the world’s reserve currency, we would see nothing less than financial Armageddon and the rise of a completely new era in world affairs.
Economic dominance would be handed over to China instantly, as much of America’s economic dominance is based on her being the source of the USD, defaulting would destroy the USD’s status, and the US would have to compete on a more level playing field with the rest of the world. Like I say, the consequences are not good, but the alternatives; Massive, massive cuts (of the kind that would make anyone who isn’t a purebred libertarian squeal) are either politically unfeasible, or hyperinflation, which would be even more destructive and ultimately, futile...