[kevinrpope]

Having rollover-debt - paying off an existing debt holder with a new issue - is deficit-negative (ie. it makes the deficit worse) because of the interest involved.

The problem is a combination of the new issue capital needs to be in the door so the old debt can be paid off (as you mention in your last sentence here) and that more debt needs to be raised each cycle to pay off the interest from the last cycle.

Also, default will not be avoided by spending cuts or tax increases alone. The debt ceiling MUST be raised so the government can borrow more money to pay the bills (I believe you asked a question related to this later on in this thread). Spending cuts and tax increases will help with future ceiling raises, but are currently relevant only as part of the bargaining to raise the debt ceiling.