That's right, it's not! Baudrillard once noted that debt would spiral out into orbit suggesting that it will build beyond earthly, reasonable limits. But it would not result in catastrophe because...well...it would not be allowed to become real. So if we consider US indebtedness to China, Greece to the EU/Germany or some other such scenario in this way, the only point at which such debt would really come crashing down on heads would be if the creditors called in their markers.
THEN reality would step in. Then the carefully contrived kabuki dance that we are witnessing with the Eurozone or the Tea party versus Obama would be over. Then anything could happen: currencies collapsing, trade halting, war, and so forth. But that would not serve the interests of the political classes which use/manufacture these various crises to their benefit in order to show that they still have control. And they do. But only so long as they can keep the debt from ever becoming real.
I guarantee you Merkel is not losing sleep over Greece or Ireland. The key is not ever to tip manageable crises into unmanagable in-your-face-reality, e.g. Ireland saying it will not pay. Witness the punishments that Iceland is receiving from the IMF, EU and the bond market for not playing nice, for trying to force the crisis to a head, instead of kicking the can down the road like everyone else. Keep it real? Higher taxes or lower spending to bring down the deficit? No way. Keep debt all unreal. Force it higher and farther into orbit! That is the secret.
p.s. all of you fiat currency enthusiasts, you are inconsistent if you do not also believe in fiat debt!