The more a country is in debt (especially to other countries) the more their foreign debtors have leverage over what policies the debted country can enact.
Not necessarily, because national debt (eg bonds, t-bills, etc) can be owned by anyone, not just foreigners. In the case of the US, as it happens, most national debt is overwhelmingly owned by Americans --think your IRA: whatever percentage of bonds you own is government debt to you.
The confusion arises because one particular strategy of hedge funds in the past has been to buy up huge controlling amounts of dollar-denominated bonds/debt from small export-dependent countries so that, if the country's economy slows down and they have to devaluate their currencies to boost exports (and thus growth), they end up unadvertently increasing the amount owed to the hedge funds in dollars. This can easily get way out of hand, thus causing the well-publicized financial crises of the 1990s, Argentina's, Greece[1] etc. But this scenario obviously does not apply for countries that do not issue foreign-currency bonds, like the US.
[1] The case of Greece is even worse because they cannot even devaluate "their" currency to boost exports, so all they can do is intentionally depress or deflate their economy to make everything (salaries, land, inputs) massively cheaper; or refinance their debt with EU-backed loans.
Not necessarily, because national debt (eg bonds, t-bills, etc) can be owned by anyone, not just foreigners. In the case of the US, as it happens, most national debt is overwhelmingly owned by Americans --think your IRA: whatever percentage of bonds you own is government debt to you.
The confusion arises because one particular strategy of hedge funds in the past has been to buy up huge controlling amounts of dollar-denominated bonds/debt from small export-dependent countries so that, if the country's economy slows down and they have to devaluate their currencies to boost exports (and thus growth), they end up unadvertently increasing the amount owed to the hedge funds in dollars. This can easily get way out of hand, thus causing the well-publicized financial crises of the 1990s, Argentina's, Greece[1] etc. But this scenario obviously does not apply for countries that do not issue foreign-currency bonds, like the US.
[1] The case of Greece is even worse because they cannot even devaluate "their" currency to boost exports, so all they can do is intentionally depress or deflate their economy to make everything (salaries, land, inputs) massively cheaper; or refinance their debt with EU-backed loans.