The first question on the new Q&A page was:
Can you explain why you don’t think the USA is going to have a Greek style debt crisis?
Good question! This is one of those things that really confuse people because they understand how their own lives and businesses work as revenue constrained entities. But the autonomous currency issuer to household or business analogy doesn’t hold true. The reasoning is actually quite simple.
The USA has an institutional arrangement in which it is a currency issuer. That is, while the Treasury is an operational currency user (meaning it must always have funds in its account at the Fed before it can spend those funds) it is always able to harness the banks to procure funds. This is achieved through bond auctions in which the dealers are required to bid. The NY Fed explains:
Primary dealers are also required to participate in all auctions of U.S. government debt and to make reasonable markets for the New York Fed when it transacts on behalf of its foreign official account-holders.
So there’s never a concern about auctions failing in the USA. That is, the Treasury is a currency user, but the government as a whole can be seen as a currency issuer by institutional design because of this implicit funding guarantee. And even in a worst case scenario (let’s say a hyperinflation in which the dealers boycott auctions as bond prices collapse) the Treasury can always use the Fed as funding agent (but don’t mistake the current cases of QE as “debt monetization”!). So the key here is that there’s no solvency constraint as in, “running out of money”. Greece doesn’t have this arrangement. In fact, since the ECB is essentially a foreign central bank there is a real solvency constraint. So banks and private investors have become hesitant to buy Greek bonds because of this flawed institutional arrangement and the lack of an implicit guarantee. It’s apples and oranges compared to the USA.
I would highly recommend reading the links at this page for more info.