"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default." Alan Greenspan
So yeah, it's just my opinion but to me the mechanics and context of the US's federal debt is so departed from that of household finance, that it's more detrimental than beneficial to even use them in the first place. But again, I understand the desire to anchor it to something people recognize.
In reality, savings and debt are basically two sides of the same coin - one is a promise for future consumption, and the other is a promise to forgo future consumption that balances it out.
One of my favorite simple models is sectoral balances - you can divide US dollar holders into domestic and foreign categories, and then divide up the domestic category into the private sector and the government (leaving 3 categories total).
If you don't print money, the net saving should all add up to zero. If the government is running a surplus, that means the combination of the private and foreign sector is going into debt. If there's a trade deficit, then the combo of the private sector and government are going into debt. Etc.
People can still be against government deficits with such a model, but it's not because everyone should save up at the same time (they literally can't). It's because they want the private sector to go into more debt, and are worried about government debt "crowding out" private sector debt. And more private sector debt isn't always a bad thing - in practice it might mean more housing, factories, and other sorts of investments that debt finances.
Unlike at the micro level, at the macro level your spending is my income.
That alone changes (almost every) received microeconomic intuition.
While this is partially true:
1. Sovereign nations absolutely can and do default. See, Russia in the 1990s and the LTCM fiasco.
2. Even though they do not have to default and can always print money to pay their debts, doing so causes inflation. How much inflation it causes is proportional to how much money is printed.
Now, the dynamics of inflation are pretty complicated, so in certain circumstances you can get away with it for a while. But it is not the case that the government can print money indefinitely with zero consequences.
https://en.wikipedia.org/wiki/1998_Russian_financial_crisis
Most countries just choose not to do this. They weren't forced to default. They could have chosen to monetize their debt. They just didn't choose to do that.
Over time it's gotten harder for me to figure out what the side of caution even is. If they are too aggressive in stimulating the economy, they risk inflation. If they are not aggressive enough they risk a persistently weak economy, escalating political dysfunction, and (if history is a guide) eventual collapse of the status quo and usually even-more-inflationary policies.
It doesn't seem like there is a safe path anywhere - errors on either side seem like they could be potentially catastrophic.
The fed could find itself in the position of fighting a structural imbalance such that for every dollar lent to the government the deficit increases by 1.X dollars. This would be the case under rampant corruption, rampant inflation, or an economy collapsing.
https://en.wikipedia.org/wiki/Carter_bonds https://www.treasury.gov/resource-center/international/ESF/P...
That has negative consequences that are papered over by making simplistic statements like that. The debt is still bad and going to result in bad things happening, and no platitudes from the Fed are going to change that.
