ABSTRACT
Imagine the following scenario. Revenues plummeted and interest requirements mounted. Many claimed that default was inevitable. The precarious situation existed for nearly two years. Attempts were made to refinance the government's bonds in an effort to relieve the financial strain. However, it became increasingly difficult to convince new creditors to buy the new bonds. No assistance was forthcoming from the federal government. Finally, on March 1, the first of the major defaults on bond obligations occurred when the government could not make its regular interest payment.
