I work at an investment fund. If we held these assets, I assure you we would be trying to get paid if the government reneged. It would be a default, and government defaults are a very big deal with serious consequences for the country. So your suggestion is not really an option. Either the future government can enact the policy and get their debt wiped for free, or they can continue to pay the debt.
It’s a very strong enforcement mechanism, since the benefit to enacting the policy is so high.
I work at an investment fund. If we held these assets, I assure you we would be trying to get paid if the government reneged. It would be a default, and government defaults are a very big deal with serious consequences for the country. So your suggestion is not really an option. Either the future government can enact the policy and get their debt wiped for free, or they can continue to pay the debt.
It’s a very strong enforcement mechanism, since the benefit to enacting the policy is so high.
Defaults only matter due to reputation. But stopping a weird practice which no one else does doesn’t really damage reputation.
What’s stopping Congress in the 49th year from passing an exemption into law that lets the government then ignore it with minimal consequences?