Look at the math. If we hit interests rates as high as the early 80′s, and these times seem worse, then what will debt service be?

Rates hit 20% before.

Congress shows no inclination to stop spending.
The debt is at $14,000,000,000,000. (seems like too many zero’s)

Most of our current debt is short term debt. We financed our country with an ARM essentially.

Thanks to that ARM, we will pay whatever the highest interest rates are.

The current debt at 20% means $2,800,000,000,000 per year in interest.

The total receipts estimate for FY 2010 is $2.381T.
From (The United States Federal Budget for Fiscal Year 2010, titled A New Era of Responsibility: Renewing America’s Promise) Obama’s budget.

As congress keeps borrowing, the debt is projected to hit $24T within 10 years.
or $4.8T in annual interest payments if rates haven’t come back down.

OK. What if we don’t hit interest rates THAT high? Maybe only 10%.
Still leaves debt service at $1.4T. Over half of the actual revenue of the government going to pay interest. After 10 years interest will be $2.4T. Of course the assumption is inflation is going to save us all. When a cheeseburger from the discount menu at McDonald’s costs $1,000,000 a Trillion dollar debt doesn’t seem so bad right? (Million Dollar Menu, I should trademark that for future use.)
The budget projections aren’t forecasting even the smaller rate of 10%. When the rates hit 10% or 20% the $10T in new borrowing will become $20T or $30T.
This is a snowball. As the higher borrowing becomes necessary to service a higher than planned for debt then the payments also get higher and so on.
As the cost of living in dollar terms gets higher so does the costs of government. So $4T budgets become $10T budgets. If the proportional rate of borrowing persists then we’ll borrow at least $4T to make that $10T budget. Before accounting for the noted increase in debt service.
There comes a point in the lives of many Americans where they sit down in front of a little bald headed guy who has three calculators on his desk and he is able to use all three simultaneously. And he begins to explain how things are going to be from now on. The fancy house is gone, the cars are gone, the boat is no more.
We don’t yet know Hu the accountant will be that will preside over our national bankruptcy. We might be able to guess Hu. First we’ll need to figure out Hu we owe the most money to. Hu has the most to gain? Hu would like to see us suffer?
If we can put that all together then we will know Hu. Or Hu will know us.
On the topic of hard assets I agree. Anybody who doesn’t have them will certainly lose a lot in a high or hyperinflationary period.
Another thing to remember about inflating your way out of this. The purpose of inflating your way out of debt is to reduce the REAL value of the debt by reducing the REAL value of the medium the debt is denominated in. In this case the dollar. It is a way of ripping off your debt holder.
Who will we be screwing when we do this? China? Grandma? The small but successful business that has managed to put away a little in a rainy day fund? The idiots bought government bonds; what were they thinking?

Once again the guy who did the right thing, lived within his means, will be getting burned by Big Brother.

The conservatives who opposed the creation of the FED knew this is where it would eventually go.

It has always been the inevitable result of living beyond your means.

The FED was designed to allow the government to live beyond its means.

btw, How do you format text in comments like smileys and bold, etc?