If China moves to recall the trillion dollars or so that they are owed because they no longer trust US debt, or even just to offload it, the effect on the average American would be devastating. The benefits in increased exports would be more than compromised by increased costs for basic goods and services. Inflationary pressures would become severe and interest rates – one of the Fed’s primary tools in fighting the recession – would be forced to rise to combat it.  It simply makes no sense to run the risk of the sort of collapse that would ensue if the government loses the ability to borrow because of a lack of confidence.