2020: Could the US default?

BECKY QUICK: All right, this question comes from Charlie Wang. He’s a shareholder in San Francisco. He says, “Given the unprecedented time of the economy and the debt level, could there be any risks and consequences of the U.S. government defaulting on its bonds?”

WARREN BUFFETT: No. The — if you — if you print bonds in your own currency, what happens to the currency is — it can be a question, but you don’t default.

The United States has been smart enough, and people have trusted us enough, to issue its debt in its own currency.

And Argentina is now having a problem because the debt isn’t in their own currency. And lots of countries have had that problem, and lots of countries will have that problem in the future. It is very painful to owe money in somebody else’s currency.

But if you — listen, if I could issue a currency — Buffett Bucks — and I had a printing press, you know, I could borrow money — and I could borrow money on that — I would never default. (Laughs)

So, what you end up getting, in terms of purchasing power, can be in doubt. But in terms of the U.S. government — when Standard and Poor’s downgraded the United States government — I think it was Standard and Poor’s, some years back — that, to me, did not make sense.

I mean, in the end, how you can regard any corporation as stronger than a person who can print the money to pay you, I just don’t understand.

So, don’t worry about the government defaulting.

I think it’s kind of crazy, incidentally — this should be said — to have these limits on the debt and all of that sort of thing, and then stopped government arguing about whether it’s going to increase the limits. We’re going to increase the limits on the debt.

The debt isn’t going to be paid, it’s going to be refunded. And anybody that thinks they’re going to bring down the national debt, I mean — that — you know — there’s been brief periods — I think in the late ’90s or thereabouts — when the debt has come down a little bit.

The country is going to print more — incidentally, the country is going to grow, in terms of its debt paying capacity. And — but the trick is to keep borrowing in your own currency.