The US government paying off the national debt by borrowing more money, and/or printing more US bonds and selling them.
This is an over simplification, but when these existing US bonds come due, the US government redeems these bonds with US dollars that are raised by selling more freshly printed new paper US Bonds at the periodic US Federal Reserve (FED) auctions, or trading the matured US bonds for new freshly printed paper US Bonds (at some discount).
Only the FED, at the direction of the chairman Mr. Bernanke, is allowed to legally print brand new US dollars, US bonds, T-Bills and other currencies in the amounts authorized by the US congress, and then sell these instruments to the public to raise US dollars for the US government to spend paying government expenses.
Only the FED is authorized by congress to create US dollars by printing and selling freshly printed US bonds, T-bills, and other instruments to people holding US dollars, mostly foreigners that were paid by US citizens with US dollars to make the things that the US citizen consumed, in order to get back US Dollars to spend for US government expenses that are in excess of the money raised by US federal taxes.
A large dollar value of US bonds that were printed and then sold in the past decades to get back US dollars to sustain US government deficit spending are maturing soon and these bond owners expect redemption for these US bonds with US dollars (or other US or equivalent foreign currency of gold).
Many of these bonds were purchased by foreign industrialists at some past FED auction (at a price that was less than the present worth of the bonds) with the US dollars that were paid to the foreigners by US import/distribution/retail companies for US consumer goods and US manufacturers who imported parts and assemblies for final products that were labeled "Made in America, or the US, or Texas".
Many US manufacturing companies are assembling foreign manufactured parts and subassemblies into final products in some US located plant using US labor, and then these products are labeled "Made in America", even if only the nameplates added to the product in the USA by US workers.
These foreign owned paper US bonds are deposited into US bank accounts that redeem these US bonds into US dollars in these foreigner's bank accounts.
The foreigners then withdraw these US dollars from these bank accounts to purchase title to existing privately owned businesses, factories, casinos, hotels, farms, land, ports, breweries, refineries, forests, ports, breweries, refineries, and other privately owned wealth and assets located in the USA that were created by previous US generations before the USA stopped generating wealth.
Mr. Bernanke cannot disobey congress, or Congress would fire him and then hire someone else to continue to operate the Ponzi scheme that finances our various US government expenses.
Maybe the US government should hire Jeff Skilling, Bernard Madoff, Scott Rothstein, Eddie Fastow, and Sir Allen Sanford plus some of the lesser known Wall Street Master Criminals and financial wizards as consultants to advise the US treasury department and the Federal Reserve Board concerning "How to operate a Ponzi Scheme"! These gentlemen might be the best qualified individuals in the USA to run the US Treasury department.
The US currency purchasing power might diminish when the foreigners cease buying our freshly printed US bonds, T-bills, and other instruments.
Did Greece provide their population with all sorts of government provided services, government payroll jobs, and pay for all of these government expenses with "borrowed" funds? Did the Greeks stop generating national wealth, and decide to start deficit spending to mimic the US financial operations which appeared to be very successful?
Will the US face similar consequences when working individuals will no longer purchase any of the freshly printed new paper US Bonds at the periodic US Federal Reserve (FED) auctions to continue our US government operations.
No. Any bank can create money using the Fractional Reserve Process. The Federal Reserve makes the whole process worse by adding money into the system which the banks take and expand further using fractional reserve process. The reality is that prior to the giant increases in money by the Federal Reserve there was about a 100 to 1 ratio of currency to Fed stored reserves.
As for paying off the US Federal Debt, the Congress has no intention of paying this off and why would they when the Federal Reserve is there to create money to pay bonds. Of course this is inflationary and causes automatic increases in Social Security Payment and federal employee payments and what not but that is a problem for later generations.
What will the US government do when the foreign industrial nations no longer pay US dollars to purchase freshly printed paper US bonds, or if they pay only few pennies on the dollar face value or present worth for these freshly printed paper US bonds.
The US government will print up twice the value desired if the foreigners are only paying 50 cents on the dollar, or 100 times if the bids are 1 cent on the dollar.
As the USA runs out of title to privately owned real estate, businesses and other existing assets in the USA that foreigners redeem their freshly printed paper US Bonds, etc. that foreigners were paid by US import/distribuiting/retail companies to created with their labor to manufacture the things that US citizens consumed, these productive foreign industrial nations will then pay less and less US dollars for the freshly printed paper US Bonds, etc. that the US government wants these foreigners to buy at the periodic FED auctions. This is creating wortghless currency with the printing presses, except that these new currencies are redeemed with title to US assets instead of Gold from Ft. Knox.
The US government is operating on borrowed money.
The US consumers are trading title to everything in the USA for the priviledge of not working an some dirty factory to make the things that we consume.