The debt ceiling can be raised as high as the US government wants, but where do you think all that debt came from?

Foreigners and/or American citizens need to be persuaded to lend the country money. The interest on the debt is their incentive to lend money. If the American debt gets to high, they will insist on higher interest rates to compensate them for the risk. If interest rates get to high, the American government won't be able to sustain itself. At this point, it doesn't matter how high the debt ceiling is, foreigners won't lend their capital to the government.

There is a temporary reprive for the government. Becuase the US dollar is fiat money, they can print unlimited quantities. (This is known by the euphamism "quantitative easing"). However, as the amount of dollars in circulation increases, the value of each individual dollar falls. In this instance, interest rates still rise because the lenders factor in the fact that the money they are getting back is worth less and less. Simultaneously, this causes inflation. People who hold the currency, (predominately the middle and upper classes) are effectively stolen from to fund the government.

In summary, the debt ceiling is irrelevant. If politicians actually honored the debt ceiling, then it would be relevant, but by simply raising it every time they need to borrow more money the countries leadership shows that it has no intention of getting it's finances into shape.

You second question isn't theoretical. It is happening right now. There is no way the American, Japanese and British governments can ever pay back the debt they owe. None. By printing currency the USA and GB have effectively defaulted on thier debts. The Western world will at some point be forced into a severe recession of the type Greece and Portugal are currently experiencing. At this point the governments will be forced to cut spending back to a sustainable level. It is this brutal recession that fixes the problems that have been building up during the "great moderation" which is a term used to describe the period between the 90's and 2008 when interest rates where low and the economy was booming.

You mentioned that these countries could effectively threaten others that they owe money too. I don't think this is fesible. The Obama administration has shown it wants other countries to take the lead in Libya and Syria. The next president may be more gung ho, but bear in mind that enormous military spending has been financed with borrowed money, so this will have to be cut soon when interest rates start to rise again.

Peter Schiff and Kyle Bass are two hedge fund managers that have discussed this point in detail. A quick you tube search will give you a lot of info on this topic.