How governments differ from people: Defaulting on some of their obligations can actually increase their creditworthiness

Blogger Matt Yglesias, writing about Sen. Pat Toomey's (R-PA) proposal of legislation that would require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised, concludes:

Now of course this is nonetheless a kind of default. A person whose creditworthiness is above question meets all his financial obligations. Another kind of person might manage to stay current on his mortgage and make minimum credit card payments while leaving utility bills unpaid and welching on sundry promises to friends and business associates. That’s not grounds for foreclosure, but obviously it’s going to hurt your standing as a borrower.

As Paul Krugman likes to say, not only is this untrue, it's the exact opposite of truth. The very reason that we may one day have trouble rolling over our debt to foreign entities is because everyone and their mother knows that what Toomey is proposing can never, ever possibly happen. The day that most analysts conclude that the US government cannot possibly meet all of its financial obligations, our foreign creditors will immediately stop buying T-bills because in the event of a US government default, interest payments will be the first thing to go. And conversely: if the US somehow became a dictatorship, and its government became more dependent on foreign money than political support of domestic voters, its creditworthiness in the eyes of China would increase, because what Sen. Toomey is talking about would in that situation actually be possible.