My initial response (on Twitter) was to contrast the freaking out with free-market economists who had favored debt repudiation as a sound (and moral) strategy.
(A) The right wingers warning about big deficits leading to fears of default were wrong, but
(B) Even if the “bond vigilantes” did attack, it would be good for countries like Japan and the US, which have independent fiat currencies and not a lot of foreign-denominated debt.
Naturally, Krugman’s fans on Twitter denounced my dishonesty for claiming that was his position.
The whole thing is funny. I am partly guilty here too, to be sure, but I think when person X suggests “a Treasury default might be a good idea,” people’s reactions depend on who person X is.
Now note that this is not completely due to tribalism. I think it’s fair to say that Rothbard is pointing out an aspect of Treasury default that is admirable, whereas Krugman’s argument (namely, that it would depreciate the currency when the central bank is incapable of doing so, because of liquidity trap) relies on Keynesian nonsense.