Most officials thought that sticking it to the speculators would be necessary and prudent. Hamilton, the Treasury Secretary, was an Anglophile who understood that England had defeated France because it was a good credit and France was not. The Rothschilds bought British bonds; they shuddered at France’s paper (and they made a nice profits whenever the UK won).
Hamilton believed that the US would be like Britain and not like the rest of the world: we would be a sound credit. No defaults. He redeemed all of the Continentals in gold.
The US has had many credit events since “redemption”: States have defaulted and repudiated their debts; the entire South defaulted and the US repudiated the Confederacy's debts; we issued paper currency during the Civil War (but redeemed it all in gold); we broke the gold clauses in our bonds in 1933 when FDR temporarily took us off gold; and we went off gold entirely in 1971; dollar “Silver Certificates” were with drawn form circulation unredeemed. But the US never ever failed to repay its Treasury bonds on time and in full, if you define “in full” as legal tender and not gold.
So, what was the result? The result was that by mid-20th cenury, the dollar and the Treasury bond became the dominant instruments in the world, the reference for value, the world’s reserve currency (you sell us Toyotas, we give you low-yield paper), and the image of stability and safety. Switzerland with liquid markets.
This is ultimately about brand management (and trust). Warren Buffett said that it takes years to build a reputation and seconds to destroy it. Would Coke put polluted water in its sodas? Would Toyota remove the brake pads from its cars? Would Boeing disable the control surfaces on the Dreamliner? No. But the US, which has built the most important financial brand in world history, the Treasury bond, is about to default. This really takes the cake for stupidity.
We are witnessing is the result of the ideological sorting out of the political parties. In the 1950s, this issue would have been resolved with phone calls from Ike to Speaker Sam Rayburn and Majority Leader LBJ. Rayburn and Johnson were both conservative Texas Democrats, now a forgotten species. The divide between Pelosi and Cantor appears simply unbridgeable. The last time we were in this position was 1861. That didn’t play out well either.
And by the way, default is unconstitutional. If I were the President I would pay my debts no matter what Congress does. Congress can impeach him, but the Senate won't convict. Frankly, I'd impeach him if he didn't override Congress.