Both countries are bankrupt. Both countries have no possible way to pay their debts other than through default.
People will look back at this time period and the prices investors paid for US government debt with complete fascination. It will be told alongside the story of investors purchasing dot com stocks in 1999 that had no possible way of generating revenue.
If investors want to move out the risk curve, a 5 year treasury bond today is yielding 1.01%. Incredible. Those that can time the collapse of United States debt (a bubble can go on far longer than an investor can stay solvent) will be the new "subprime" short legends of this decade.
