In the 1930s, America Defaulted on Its Debt. It Could Happen Again.

FDR’s Decision to Drop the Gold Standard Holds Resonance Today as Big Bills Come Due

In the darkest days of the Great Depression, President Franklin D. Roosevelt, with support from Congress and the Supreme Court, agreed to wipe out more than 40 percent of public and private debts. With that decisive action, the United States staved off bankruptcy and began to claw its way back to stability and, eventually, prosperity.

But could the default scenario repeat itself—especially now that the United States is shouldering about $22 trillion of debt, plus tens of trillions more in Medicare, Social Security, and unfunded state and local pension obligations?

That unsettling …