If the nation defaults, they don't pay at all, now do they?
If they were to ever default, the rating won't go from AAA to AA. If they default, then the S&P rating goes to "D".
See: http://en.wikipedia.org/wiki/Bond_credit_rating for bond rating information.
And no, the government will intervien to try and keep the rate as low as possible, as they don't want to have to pay back anything more than they have to.
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