Sovereign Debt Default

Taking in more debt to pay for old debt is not sustainable. I suspect this crisis will be deflated by some measures of default (refusing to pay back debt) and inflation. In no way can western states sustain the entirety of their assumed obligations (to bond holders, social beneficiaries and special interest). People are getting stiffed on old debt, it's only a matter of who, how much and how soon.

Why not just default on the 'debt'. It's not like the Federal Reserve are gonna send the bailiffs around.

What happens when the world stops buying our debt

That's in theory. In practice the shock that ending that will cause will end any hope the US has of paying back it's debt, or even the interest on it, immediately. So it will cause an immediate default and destroy the economy that promised to pay it back in one fell swoop. There's no way out of that situation that doesn't involve reneging on repayment. Either directly (any sovereign nation, like the US, can simply legislate it's debt away like Greece -partially- did, and

The debt won’t disappear. The taxpayers will have to pick that up.

Don't you mean "bad news for a debt driven economy"?

This debate confuses public debt with private debt. I doubt USA is going to tell someone else they cannot collect a debt. But as a creditor, USA has the option to call a loan of its own lending forgiven. See Public Student Loan Forgiveness for precedent.

Because huge debt might decrease future returns?

If only. The debt becomes worn as inflation and higher taxes.

Hilariously weak? I think they lay out a reasonable argument considering the amount of debt around the world and the fragility of the economy. The big question is: will we have deflation or inflation? I am not sure, but I doubt the USG will let itself go bankrupt.