There are a number of differences between the past when we had high debts and now. At the end of WWI and WWII much of the debt was in war bonds which governments delayed paying back until the price was right through inflation. With WWI debt they did a forced cut on the interest rate in 1932 from 5% to 3.5%. Technically this has been considered by some a default, but it is questionable where the Government had the right to refinance them at anytime. At the end of WWI and WWII our demographics and low welfare spending were very different to what they are now.
There are currently several elephants in the current room. Off balance sheet debts which includes the refinancing of the banks, PFI, future government and state pension commitments, the unwinding of QE, especially where the current Government nicked the interest, which had been put aside to cover losses, which must be painful where bond prices have dropped significantly of late and of course demographics.
The chart below shows how fast the Government's bill for pensions is rising from £129.6bn in 2012 to an estimated £149.6 in 2015, and this is also going to put the amount that old people are going to consume of the NHS budget up, where old people need more care, treatment and drugs.
http://www.ukpublicspending.co.uk/uk_budget_detail_13bt12012n_0040#ukgs303Using OECD standard for the figures the UK debt is currently about 110% of GDP, but the worry is that our deficit went up slightly last year at £120bn. The chancellor is relying on growth and inflation to bring this down, if he doesn't get the growth then he will use plan B of higher inflation which is stealing our wealth by stealth. Once your debt to GDP ratio is above 100% then economic options tend to start to get much more painful.
Of course whatever the difficulties, society will survive, like it has in Greece, but that does not mean life will be pleasant for a much bigger percentage of the population.
Kate you are right higher inflation normally means higher interest rates, where holders will look at the post inflation return and tend to sell UK Gilts to invest in other country's sovereign bonds or other things that offer a better return. UK Gilt prices will drop, pushing up the yield, which is what is happening now. You also tend to get yields rising as an economy recovers from a recession, where holders sell them to invest in the growing economy in the expectation of a better return. As the economy recovers the £375bn of QE money sloshing around in the system is adding and will continue to add to inflationary pressures, so there are Gilt investor's concerns here along with the amount of debt, where we having a history of using high inflation to bring them under control.
Socialist and Communist like to continually write off capitalism but history has proved that it is a much better driver of innovation, allocation of capital and wealth creation, compared to any other system that has been tried, hence the failure of the Soviet Union, communist China where it was a case of starve or adopt capitalism. The two countries that currently embrace communism North Korea and Cuba struggle to feed themselves and the populace have very low standards of living. History has also shown that communism and liberty and human rights are mutually exclusive. All of our living standards, health and life span have constantly risen since the capitalist led industrial revolution.