[hvb2]

I understand your distinction, and I reiterate that this is a valid point.

However, it's a bit moot in my opinion. When the US owes me $100B and they pay that by 'creating' $100B through the central bank, in terms of value of the currency that's bad because there value of that payment dropped.

You can do this, it's what the quantitative easing policy did, but only in very limited amounts. If you were to do it because you were no longer solvent I would expect it to be the end of the trust and value of your currency. So in a sense it's not very different.