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It merely proves if it were not for the printed money, the government would have apparently defaulted on its obligations years ago. But that is no reason to celebrate.

Even though the national debt soared 10 percent last year alone, countries like China held back on any net purchases of debt -- indicating that demand overseas may be beginning to wane.

The basis for the dollar's reign as the world's reserve currency rests on the willingness of overseas partners to continue to transact in dollars. But if we print too much to refinance our growing debts -- in the process exporting inflation to our own creditors -- suddenly the dollar becomes less attractive as a means of exchange.

And that is where the danger lies.

Not that suddenly one day in the near future there will be a run on dollar-denominated assets -- although that is certainly always a risk, if only a remote one. But, that over the coming years, the dollar will continue to lose backing in the global economy amid severe financial strain, leading to its eventual collapse as the reserve currency.

At that point, a run on treasuries and an ensuing default would certainly not be out of the question. The foreign bailout would come to an end. Krugman has an apparent belief that the rest of the world will continue to paper over our debts without question for posterity. But that assumption is awfully risky and may prove to be fatally wrong.

When the other shoe drops, or how large the debt will be then is anyone's guess. But to pretend that it "can't happen" shows a remarkable lack of foresight -- akin to middle-of-the-pack lemmings that follow the crowd over the cliff to their own demise.