Sure, not in a literal sense (to the extent they manage internal affairs with a sovereign fiat currency, it's not possible for them to be under water in that cu

Sure, not in a literal sense (to the extent they manage internal affairs with a sovereign fiat currency, it's not possible for them to be under water in that currency), but it's possible for them to destroy their own credit due to defaulting on debt obligations to the point that the economy suffers greatly and enters a hard-to-control downward spiral for many years. I think that's what most people understand by the concept of the government going "bankrupt".