It is unconstitutional in itself to default on US debt. "The full faith and credit of the United States" clause in the constitution don't you know.
It simply cannot be done, and maintain the fiction that we live under the constitution. (The SS trust fund is slightly different because the special nature of the SS trust fund bonds allow for a semantic loophole which will allow the courts if they so choose, and they will, to default on them)
Total default would destroy the world financial system. US Treasury debt instruments are the benchmark, the ground, against which ALL financial insturments are measured. In addition the interest and principal of that paper and the ability to buy and sell it is absolutely necessary so that the books of every bank and company and huge numbers of people balance. Absent that it means bankruptsy for them, period.
All that said it might be possible to selectivly default on some foreign debt. For instance defaulting on China central banks holdings would be a slam dunk political winner today, and they are still are buddies, to a degree. Japan and our other Asian allies are a differnet matter politically in a foreign policy sense but here at home screwing the rest of the world will increasingly be a winner.
(There is a technical issue which would allow individual country defaults. Central Bank holdings are in fact held here on ledgers in their names. In other words they are not fungible in the sense of other Treasury debt.The Chineese for instance can't just put their bonds up for sal, at least in the normal way. THey would have to ask the Treasury, real nicely I suppose, to give them some of their own bonds.(You will recall Bush's act in front of the printout at the WV Bureau of Dect a couple of weeks ago. In fact all Treasury bonds are just blips on a screen or numbers on a printout. Only Savings Bonds are paper.) Until the Chineese bonds are held in some account as a blip, somewhere besides on the Treasuries computer they are not sellable)
Still, the further such defaults go, after abandoning the constitution of course, the more the world financial and econmmic system collapses. THe only way that would be tolerable politically would be during an already unfolding depression, where blaming or punnishing others would become attactive. In other word the default cannot be seen as a cause of collapse but rather a response to it. This should be an easy thing to convince the sheeple of.
This is a distinct possibility in my opinion.
There is no way we will pay off this debt which is as you can see going parabolic. Over the last 12 months the debt rose ovder $600 billion. In dollars, not inflation adjusted ones I admit, this was a good portion of the total from the New Deal, thru WWII to the Great Society. IN 12 MONTHS.
For 70 years we hear of the fiscal depradations of Roosevelt and his successors, and it turns out their contribuion is almost invisible.
Anyway we are not going to pay this off. Constitution be damed.