&quot;Technical default&quot; and &quot;Effective default&quot; are obviously different, but if the purchasing power of the dollars you&#x27;re paid in are only 1% of the dollars you&#x27;ve loaned, that&#x27;s effective default.<p>If the government practices effective default over a period of 50 years most people don&#x27;t really get it.  If the government practices effective default over 3-6 months, everyone will understand and it could be very destructive.  It would definitely cause a lot of social unrest.