In the second panel, we see that the treasury is practically nil (a bad thing). In the third panel, we see the “spin” that makes it out to mean they’re not in debt (a good thing).

However, I do see that in the third panel the king’s eyebrows seem angry-looking, making me wonder if his last statement is supposed to be sarcastic.

Either way, the joke is all about the king’s political spin that he puts on the situation.

China is not the “only” creditor to the US. It is, or was until recently, simply the “largest” creditor. Since selling a portion of that debt ($34 billion), Japan now takes (back) that honor. You’ll recall in my #2 post a link that reports the US national debt at $13 Trillion, and growing.

Ted in FL (16) is correct, with reference to my #10 link. There I was simply trying to answer paperboy’s question about creditor vs. debtor nations. There can’t be one without the other. As far as T-bills are concerned, you may find this link interesting.

http://www.ustreas.gov/tic/mfh.txt

Domestic debt is different, but still potentially problematic. Yes, the government is borrowing the money from its own citizens, but that doesn’t make it costless. People have a limited willingness to loan money, and I make a choice whether to buy government bonds, corporate bonds, or stocks. When the federal debt is larger, the government has to offer higher rates on bonds to attract previously uninterested investors, pulling them away from corporate bonds and stocks. That means both that a higher portion of the federal budget has to go to simply servicing the debt (rather than, say, building roads), and that businesses have less capital for activities that would improve the economy (e.g. issuing bonds to finance a new widget factory).