A government as ours can print, borrow tax or steal any monies it needs. And it doesn't have to worry about this until the economy booms. Then we get inflationar y bubbles and humungous busts. Ask old George Bush!!!
f | Today
Well if those interest rates DO RISE, there is NO IMMEDIATE effect on interest paid by the debtor country because rates of interest on bonds are fixed when bonds are first issued. However, as bonds mature, then clearly the question arises as to whether to roll them over and pay the new higher rate of interest, or simply print money and repay the relevant creditors. Now there might seem to be a problem with the latter “print” option, namely that it could be inflationary. Well you have to wonder what planet anyone who thinks that has been living on for the last three years. During that time we’ve printed money like there’s no tomorrow and bought back debt and in the guise of quantitative easing. And where is the hyperinflation? However, its perfectly possible (in particular, absent a recession) that money printing could be inflationary. But that’s no problem: that inflationary effect can be countered with a very simple DEFLATIOINARY measure, namely raising taxes (and/or cutting public spending). And assuming the latter inflationary and deflationary effects cancel out, there is no effect on anything: no effect on demand, numbers employed and so on. See what I mean? This is all a total non-problem!! Well very nearly: there is actually one very minor problem which has to do with the amount of debt held by foreigners.