US may join Germany in Pantheon of defaults

Reneging on its debt obligations would make the US the first major Western government to default since Nazi Germany 80 year ago.

Germany unilaterally ceased payments on long-term borrowings May 6, 1933, three months after aDolf Hitler was installed as Chancellor. The default helped cement Hitler's power base following years of political instability as the Weimar Republic struggled with its crushing debts.

"These are generally catastrophic economic events," said Professor Eugene N. White, an economics historian at Rutgers university in New Brunswick, New Jersey. "There is no happy ending."

The...