[quote=urbanrealtor]
If we ever really had a problem paying on those bonds we could just literally print the cash and mail it to the bond holders.
[/quote]
True, but there may (or, I will go so far as to speculate, *will*) come a time when doing that causes serious problems of its own… problems that are not necessarily all that different from actual default.
If they print more, the problems will show up more in the currency market; if they show some restraint at the press then it may show up in the bond market as in Greece. Believe it or not I actually think there is a chance that the folks at the Fed would actually restrain themselves under certain conditions, even if it resulted in a big backup in bond yields.
But that’s probably trying to speculate too many moves ahead. My point is that it could get to the point that printing money to pay back debt is not perceived as all that different from outright default.
