May I suggest that posters, if they haven't already done so, avail themselves of a book entitled;
"This Time Is Different" by Carmen Reinhart & Kenneth Rogoff.
Terrific book looking in depth at the very issues facing the developed & developing countries as we speak - external debt, domestic debt, inflation, defaults over the past eight centuries!
Domestic debt has significant ramifications and often provides answers as to why countries default externally. It's also interesting that a high level of debt to GDP doesn't necessarily give a signal of an impending default when historically many countries have defaulted on seemingly low leves of debt v GDP.
