The mechanics are different but the fundamental idea is the same. Taking on debt today is a promise to pay back the money in the future. Governments have more w

The mechanics are different but the fundamental idea is the same. Taking on debt today is a promise to pay back the money in the future. Governments have more ways of violating or manipulating that promise, but the core idea is the same. Taking your points one at a time: > the government operates a central bank, prints its own currency This is one method governments use to skirt paying the full value of what they owe. They can borrow a fixed number of dollars today, then print money and use the printed money to pay what they owe. By doing so they are paying back the dollars they owe, but because each dollar is worth less, they are never paying back the value they owe. And they will pay the price with a higher interest rate next time. > does not have to apply for credit Applying for credit for normal people is a way of offering evidence that you're likely to pay back what people loan you. The more trustworthy you seem, the less risk for the lender, and therefore the less demanded interest. Governments are the same way. The more the perceived chance that a government will not make good on its debts, the greater the interest it must pay to borrow money. > passes the laws that specify the terms of the debt it owes This is another method of skirting paying back what they government has borrowed. Drastic changes or changes which modify the rules on existing debt will have an effect on the government to borrow more money in the future. > in the case of the United States, the national debt is in the form of one of the safest and most widely held investment vehicles in the world Yes, but I think that is true because the US usually doesn't play the games that are in the earlier points. Traditionally, the US has not drastically increased its money supply and has not changed the law on existing debt. If they started doing these tricks more, I think we'll see the high regard fade for US treasuries. One last point: these are methods governments use to avoid repaying debt, but individuals in most countries have their own methods. They can default on a loan or declare bankruptcy entirely. But just like governments, that will make it harder to borrow in the future. The mechanics are different but the core ideas are the same.