regarding defaulting on nominal obligations: 1) sovereigns have defaulted in the past when they've had the option to monetize their obligations. often a sovere

regarding defaulting on nominal obligations: 1) sovereigns have defaulted in the past when they've had the option to monetize their obligations. often a sovereigns debt will be heavily owned by foreigners and it is a politically better option to fuck the foreigners. 2) a monetization of debt is equivalent to a partial default. if you bought a bunch of securities so you could cash them in 10 years to buy 20 hamburgers but now you can only buy 10 hamburgers because the price level has risen faster than you expected then this is equivalent to a 50% partial default. however, bondholders would prefer a country monetizes before it partially defaults (all other things being equal) because then they don't take 100% of the burden of default. but i think you are correct in that it is mostly willingness to pay. also, it is not just the congressman but treasury as well which came out and said it couldn't prioritise debt payments. treasury might be correct morally and legally but it doesn't inspire confidence in bondholders. :)