That’s highly misleading. Empirically, many countries have successfully raise debt, and paid it back, despite debt-holders having no defense against a new leader wanting to default.
I think one defence those debt-holders have is that those countries have traditions of repaying debts.
Another is that, regardless of whether you’re formally committed to repaying loans, if you default on one then you or your successors are going to get much worse terms (if any) for future loans. So a national leader who doesn’t want to screw the country over is going to be reluctant to default.
That’s highly misleading. Empirically, many countries have successfully raise debt, and paid it back, despite debt-holders having no defense against a new leader wanting to default.
I think one defence those debt-holders have is that those countries have traditions of repaying debts.
Another is that, regardless of whether you’re formally committed to repaying loans, if you default on one then you or your successors are going to get much worse terms (if any) for future loans. So a national leader who doesn’t want to screw the country over is going to be reluctant to default.