US debt will come back to bite. Australian Financial Review 13 March 2003 An extract:
Banana republic populism actually has it easier in the US than in the Third World because the vast majority of US debt is denominated in US dollars. Rather than resorting to repudiation, the US government can simply print all the dollars it needs and use some of the proceeds to compensate the domestic holders of US public debt (a dwindling proportion as foreigners now hold between $2 and $3 trillion of US debt) …
The world has often seen rulers whose military power is not matched by their financial means. The lesson of history is that those who lend money to such rulers usually regret it.
Update 21/4 Niall Ferguson in the NYT develops the historical parallels in a great deal more detai.