Think about it… The US, if it were treated like a corporation, is effectively bankrupt. And it has to issue a MASSIVE amount of new debt while rolling over TRILLIONS in old debt at the VERY time that most historic buyers of US debt are losing interest in lending to the US for any period longer than a few years.

So how do you create interest?

Simple, let the stock market collapse. The “flight to safety” that would follow would push billions if not hundreds of billions of dollars into Treasuries, soaking up the debt issuance and roll-over with little difficulty.

And why not? Stocks have added $6 trillion to the US household “budget.” Let a third of that slide into Treasuries and you’ve covered the current US deficit for 2010 and S&P 500 would still be at 950 or so.

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http://www.kitco.com/ind/Summers/jan082010.html