That analogy doesn't work with Governments. Here's a better example: Imagine a grandmother taking a loan for her grandchild so they can have a car to drive to

That analogy doesn't work with Governments. Here's a better example: Imagine a grandmother taking a loan for her grandchild so they can have a car to drive to work. The household income increases as a result. If she stops paying the loan the car gets repossessed. The grandchild can no longer earn money. The household income decreases. The grandmother does this for all her many grandchildren. The grandchildren all work and the family become rich. In our modern economies the now-wealthy grandchildren refuse to pay the grandmother back, but they agree to pay the interest on the loans. She doesn't push it because her house is big and busy and her family have a lovely lifestyle. Should she default and let the cars be repossessed or would it be better to get her spoilt grandchildren to start paying back the loans?