Nobody is going to risk financial instability in the US by calling in the principle sum on the loans that it has taken out  There really is no problem with the Federal Government running at a deficit virtually permanently – as it has for most of its history. There is no threat of a default as this would require any lender to commit financial suicide as a result.  The deficit allows the most powerful economic actor on earth to act as a stimulus to those in smaller roles. Paying down the debt reduces money supply and, ultimately, contracts the economy. By relying on the savings of nations like China, through bonds and other instruments, the US is furthering its traditional role of being the primary engine of global economic growth. [i]  [i] Rich Millar. “Democrats Rubin, Schwarz Clash on Spending Versus Deficit Cuts”. Bloomberg. 11 June 2007.