Here’s an attempt at explaining how I’m thinking about this:
1. Government sells inflation-adjusted bonds.
2. Does not decrease deficits.
3. Inflation increases the cost of debt service for inflation-adjusted bonds which in turn increases the cost of debt service for all govt debt.
4. Bondholders expect that inflation will be even higher because additional debt service costs blow out deficits even more.
5. The risk premium increases faster than the government’s ability to channel money towards debt service.
6. The default happens far sooner than anyone expected because higher inflation expectations led to a runaway increase in the risk premium demanded by bondholders.
7. Alternatively, a credit downgrade leads to an even higher risk premium demanded by bondholders, making the situation worse.

If they only sold inflation-adjusted bonds and ran persistent deficits above growth in nominal revenue, then that sounds pretty unsustainable – and would eventually lead to default right. Which would imply a rising risk premium in the interim.

I’m not quite sure what you are saying about inflation expectations here. Is there any chance you could elaborate.