system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Can the US declare Bankruptcy?

If this is a yes, how would they go about it and how badly would it hurt the world economy? 

If this is a no, why not? If there's a debt, should they not be allowed to file that bankruptcy? Seeing how business can do it fairly easy, shouldn't a country be able to as well?
gpt
Sort of, although 'bankruptcy' is the wrong term. A sovereign state cannot declare bankruptcy because there is no-one to declare to. Instead they could announce they would fail to honour their debt obligations and default on the debt. This would cause massive shockwaves throughout the global economy since US debt is considered one of the safest investments possible, and would wipe out a huge amount of wealth both in the US and around the world. For instance, about 30% of US debt is held by foreign investors (China and Japan being the largest sources), and 20% is held by domestic investors. The remaining 50% is actually owed to the US Federal Reserve.
The US is in a very unique position because of the dollar's hegemony, so they wouldn't have an economic reason to default on their obligations (the only risk factor would be political grandstanding around the debt-ceiling).
However, for other sovereigns, the reason they choose not to default (even though they can), is the fear of being locked out of borrowing in the future. Creditor-led restructurings of debt are much more common.