I am in no way suggesting the United States defaults. I am only pointing out that comparison to Japan is absurd. If the Japanese government defaulted on its debt the entire nation would implode. It can also sustain huge debt with no inflation because the debt is held almost exclusively by a homogeneous nationalistic culture.

I think however that you can compare Japan of the past decade or two with the entire world today, but not any one nation, and most certainly not the United States.

Your graph proves my point. The debt is around $15 trillion. The US tax revenues are $2-4 trillion annually. If the Fed and foreign holdings evaporated, a portion of the remaining 25% could be monetized, and the US debt burden would be lower than high tax oil producing Scandinavia.

I do however believe it is a possibility that national debt defaults (and war) will become the norm during our generation. In this environment, the United States could join the shit party and come out of cleaner than ever.