People confuse two different debt crises: (a) financial crises from external debt or default risk (not China's problem because China has all domestic debt in its own currency), and (b) crises from misallocated investment, where debt represents investments that earned low returns and create wealth destruction requiring large transfers to service; the US in the 1930s and Japan after 1991 both had domestic currency debt with no external debt but suffered severely from the second type of crisis.