Excerpted with permission of the publisher John Wiley & Sons, Inc., www.wiley.com , from Debt, Deficits, and the Demise of the American Economy by Peter Tanous and Jeff Cox (c) 2011.

By Peter Tanous and Jeff Cox

Will the United States Default on Its Debt?

In a word, no. The United States doesn't ever need to default so long as our currency remains desirable and relatively safe. We always have the option of the printing press to make more currency with which to pay back the debt. As inflation lurks, we will wind up paying back our old debt with cheapened dollars. This scenario is widely discussed as a possible solution to our towering debt.

But is it realistic?

Here's the problem. About 40 percent of our federal debt is scheduled to mature by midyear 2011. Seventy percent of the debt will mature within five years.7 If investors smell even a whiff of inflation, they will demand higher interest rates when the government attempts to roll over (reissue) the debt as it matures. And since so much federal debt is maturing within the next few years, it is very important to keep interest rates low in the short term.

For a strategy of "inflating our way out of debt" to work, we would need to have a much higher proportion of long-term debt to short-term debt. Indeed, we can't inflate our way home if inflation causes us to roll over existing debt at much higher interest rates. Doing that just makes a bad problem even worse.

Moreover, we also have TIPS bonds, which are Treasury bonds that adjust for inflation. These would react swiftly to a rise in inflation since the principal amount on these bonds is adjusted for inflation every six months. At this point, however, inflation-adjusted bonds (TIPS) account for only 7 percent of the total.

The fact that 40 percent of outstanding Treasury securities will mature in 2011 sets the stage for the crisis. But in our view, the chain of events leading to a world stock market crash will start not in the United States, but rather in Europe.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.