It is all relative isn’t it? We owe a lot but others owe more... China owes 300% of GDP?... etc.
I remember a deal a company I worked for got tangled in. Short story, I was one of the three that went to confront the offending party with his fraud and debt. He had a nice office full of Western art. He was jovial, he knew what was coming. When the team lead spilled the deal the guy reared back in his chair and said, “Boys, you got me dead to rights but I”m flat asses broke!”
The team lead, a very naive fellow, retreated and we said our good-byes and went to lunch. He was dumbfounded. “What do we do?” he said. After an appropriate silence I said, “Nothing. We go home.”
What happens when a nation can’t pay its debts? Nothing, you go home. The currency collapses... relative to what? The other more valuable currencies and the game goes on?
On the way out the door you take all that nice western art.
When you owe the bank a 100k and can’t pay, you have a problem
When you owe the bank a 100mil and can’t pay, the bank has a problem.