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I'm not much of a Peter Schiff guy but that doesn't mean he doesn't have the occasional interesting quote or idea. He was interviewed over at IndexUniverse and among other things he said:

...they (buyers if US Treasuries) don’t want to keep lending money to a country that can’t pay back what has already been loaned to it.

Implying that the US would ever intend to pay off its debt is misleading. There is no need to pay it off and the functioning of capital markets and the global financial system relies heavily on the existence of US debt across the entire yield curve.

However there is huge difference between not intending to pay off the debt and having no shot of paying it off, save for monetizing the entire burden. Schiff may very well be correct that we will never be able to pay it off - we may never want to - but it would be nice if we could.

Schiff does ask some good questions but I think he draws the wrong conclusion on a lot of things. He is calling for $5000 gold which I think he has been calling for since he first started getting face time on stock market television. Gold could go to $5000 but it would happen against a backdrop of just about everything else being destroyed. That is what he's calling for but I think we have ample evidence that the President/Fed/Treasury won't allow that to happen.

That certainly might be a bastardization of capitalism and based on what we've been taught, there should be dire consequences, but that hasn't happened yet.

Source: Dissecting Peter Schiff On U.S. Debt