Еб меня к смерти! Слава Cталину!

Yes gov debt does matter, but not in the way you imagine, it matters through how deficits are spent (and THIS is the problem right now in the US: it is spent on subsidising insolvent banks owned by superrich capitalists, instead of taking these banks over and spending government money on useful and badly needed things like education, health care, public transportation and so on), and through its possible inflationary effects. No, deficits (and/or expansionary monetary policy) are not necessarily inflationary: Japan has been expanding its money supply like crazy ever since 1989, and not only did this NOT result in inflation, on the contrary, they couldn’t even get out of the deflationary spiral. this is because money (the money supply) is endogenous, and monetarism (AKA the ‘quantity theory of money’) is false.
Check out here: “In other words, the monetarists have got the wrong end of the stick - money supply responds to the demand for money not vice versa.”
http://www.monthlyreview.org/090413-vasudevan.php

No, China did not get cold feet about buying Treasuries, actually it boosted its purchases of TBs.
see it here: http://blogs.cfr.org/setser/2009/03/04/how-a-us-financial-crises-rebounded-to-benefit-the-dollar-three-pictures especially this picture: http://blogs.cfr.org/setser/files/2009/03/dec-tic-4.png

No, Wray does not “blame” the 2000-2001 crisis on Clinton (who does not matter), as he does not blame the present crisis on Carter (which would be very silly indeed) – both of these crises have much deeper roots than the minuscule, negligible variations of policy that happen between Dem and Rep administrations. Will you please try and forget the Republocrats? There’s no difference between them anyhow.
However, the 2000-2001 crisis could have been probably averted, or at least mitigated by adopting less restrictive fiscal policies. BY the way, Wray and his colleagues at the Levy Institute precisely foretold both of these recessions (2000-2001 and 2008-?), but they weren’t listened to…Check out the “strategic analysis” section at the Levy Inst website (pieces between 2003-2007)…it is quite astonishing to see how they tried to draw attention again and again to the looming crisis, but were invariably ignored…
I could go on.
And finally: yes, you need to learn more political economy.
(of course that applies to all of us (including me))

(This is, obviously, not to endorse the bank-bailout which is a scandolous robbery of the American public by the corporate-financial élite…But that’s another story…)

When USA’s Treasury Bonds mature, they MUST be paid to whoever country bough them. That used to be Japan, now it’s China. But China recently has been getting cold feet about buying any more new TBs. Paying the TBs is paying debt. Don’t play ignorant.
USA went from the largest creditor to the largest debtor in just 25 years. That’s fine as long as somebody is willing to finance its debt. How long will that be? 30 years? 50?
China recently became Brazil’s favorite trading partner. While all USA does is import wars of conquest, China and Russia make finance. Debt doesn’t equal money either. All it equals is …debt.
About that article you linked to: oh so predicable to place the 2000 recession on Clinton. Same as placing the housing crisis on some law Carter passed way back in 1977 or 1978(like Reagan couldn’t have revoked it) Which Democrat should we place the current crisis on?

check out this:
http://www.cfeps.org/pubs/pn/pn0601.htm

“We can divide the economy into 3 sectors. Let’s keep this as simple as possible: there is a private sector that includes both households and firms. There is a government sector that includes both the federal government as well as all levels of state and local governments. And there is a foreign sector that includes imports and exports; (in the simplest model, we can summarize that as net exports—the difference between imports and exports—although to be entirely accurate, we use the current account balance as the measure of the impact of the foreign sector on the balance of income and spending).

At the aggregate level, the dollar spending of all three sectors combined must equal the income received by the three sectors combined. Aggregate spending equals aggregate income. But there is no reason why any one sector must spend an amount exactly equal to its income. One sector can run a surplus (spend less than its income) so long as another runs a deficit (spends more than its income).

Historically the US private sector spends less than its income—that is it runs a surplus. Another way of saying that is that the private sector saves. In the past, on average the private sector spent about 97 cents for every dollar of income.

Historically, the US on average ran a balanced current account—our imports were just about equal to our exports. (As discussed below, that has changed in recent years, so that today the US runs a huge current account deficit.)

Now, if the foreign sector is balanced and the private sector runs a surplus, this means by identity that the government sector runs a deficit. And, in fact, historically the government sector taken as a whole averaged a deficit: it spent about $1.03 for every dollar of national income.

Note that that budget deficit exactly offsets the private sector’s surplus—which was about 3 cents of every dollar of income. In fact, if we have a balanced foreign sector, there is no way for the private sector as a whole to save unless the government runs a deficit. Without a government deficit, there would be no private saving. Sure, one individual can spend less than her income, but another would have to spend more than his income.”

If you think that you clearly need to go and reread your Gulliver’s Travels. Swift sucks compared to Ames.
Actually, come to think of it, I’d strongly recommend that everyone read Mark Ames more. I do.