“I fully concede, a default of any kind would be harmful to individuals and institutions holding Treasury bonds in their portfolios. It would cause investors and analysts to rethink the role that T-bills play in the financial system and could cause some painful adjustments. But why should these be the only costs under consideration? What about the cost to the US taxpayer from raising the revenues needed to pay the interest on T-bills? What about the costs to everyone holding  assets denominated in depreciating dollars — depreciation that will continue as long as the Fed maintains its policy of monetizing the debt?”

http://bastiat.mises.org/2013/10/more-on-default/

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