So the govt gives an IOU to the Fed and the Fed gives dollars to the govt... while interest rates are low the govt is getting a good price for its IOUs but that can change. As interest rates rise the govt receives progressively less dollars for its IOUs so it will need to issue a progressively greater amount of IOUs. The Fed is a private organisation and at some point may question the solvency of the government and refuse to accept the IOUs. If that happens then at that point the bankruptcy of the government will be exposed because they don't have enough funds to cover their spending.
There's a number of ways that this can play out but insolvency is the end conclusion that I've come across.
