Exerpt from http://www.baltimoresun.com/news/opinion/oped/bal-op.economy21sep21,0,1400702.story By Rolfe Winkler – The Baltimore Sun
That could never happen here, argue some. The $10 trillion national debt is "only" 70 percent of GDP, leaving the government plenty of borrowing capacity. But that ignores $60 trillion of projected liabilities for Medicare and Social Security, according to economist John Williams.
What's true of companies is true of countries: The more they borrow, the more they operate at the mercy of creditors. The more they borrow, the more violent their inevitable failure.
Under no scenario can Uncle Sam raise the trillions it needs to meet all these obligations. No tax rate is high enough, no discretionary spending cuts draconian enough. And there is no creditor of last resort for the U.S. Treasury. If default implies an Argentina-like scenario, that would leave us with only two options. The first is to print money; Mr. Williams says this would lead to "hyperinflation on the order of 1920s