Yes, kings who couldn’t pay their debts lost the ability to finance the ability to project force. Sure you can discharge your debts, but eventually the money lenders stop lending. Money is a representation of value and must correlate to the price of labor and goods, otherwise the army starts asking why they don’t have the ability to buy food. A monarch or two can get away with it by kicking the can down the road, but lenders are in the business of making safe bets.