As long as the U.S. national debt is entirely denominated in dollars, there is no risk that we will run into the sort of financial crisis that small countries often run into. What gets them into trouble isn’t the debt per se, but an inability to acquire sufficient foreign exchange with their own currency to service it. While the U.S. Treasury has never issued bonds denominated in foreign currencies, it is conceivable that it could be forced to do so if the dollar falls sharply and foreign demand for U.S. bonds wanes. That will be the point at which our debt problem becomes more than theoretical and we are really on the road to national bankruptcy.
If the powers that be are so darned concerned about foreign owned debt, why don’t they offer I-Bonds domestically at say 3-5%. They would be snapped up immediately and held for 30 years. There is a pent up demand due to market uncertainties, for a safe investment for the little guy that will hold value in the face of inflation and offer a modest return.
Instead, the Treasury has gone hat-in-hand to foreign investors and governments to borrow money while offering domestic investors 0% for a 30 year investment. They reduced the total amount that domestic investors can purchase in a given year, too.
In short, they have done everything to discourage domestic purchase of the National Debt via savings bonds that they could while selling bonds to foreign governments.