Editor’s note: Dr. Mike Walden is a William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy.

RALEIGH, N.C. – As I travel the state giving talks and workshops about the economy and economic issues, I’m able to get a sense of what’s worrying North Carolinians by the types of questions asked. Clearly at the top of the list are questions about jobs and growth in the economy. Next is concern about specific prices, such as gas and food prices.

But following in line — and somewhat surprising to me — are worries about international issues. In particular, I’m asked two questions. Can foreign owners of our debt use it as a form of economic blackmail? And is the U.S. dollar about to lose its status as the number one currency in the world? So let me try to address these questions directly.

First, let’s look at the question about our debt. Recent concern has focused on the rapid escalation of our federal (national) debt, which has jumped by almost $4 trillion in the last three years. People are worried about how much of this debt is owned by foreign interests. They ask if the foreign owners of our debt could quickly ask for their money back and thereby cause an economic crisis in our country.

Here’s the current breakdown of our national debt ownership. A substantial majority — almost 70 percent — of the national debt is still held by domestic owners, either the government or private investors. The biggest single government holder of the national debt is Social Security. Foreign buyers hold about 30 percent of the national debt.

Granted these percentages have shifted slightly in recent years. In 2007 the split between domestic (government and private) and foreign ownership was 75 percent domestic to 25 percent foreign ownership. Still, by a factor of more than two to one, any problems in servicing the national debt would be borne by domestic owners.

Now let’s turn to the foreign owners. Who are they? China is currently the single largest foreign owner of our national debt, holding over $1 trillion of U.S. government securities. Although certainly large in dollar amount, China’s holdings amount to only 7 percent of the total U.S. debt of $14 trillion. Other large foreign owners of our government debt are Japan ($900 billion) and Britain ($500 billion).

What’s the chance that any owner of our national debt will wake up one day and demand their money back? Zero! There is no chance because the investments financing the debt come with terms and conditions. Investors purchase U.S. government securities (called Treasury securities) for a certain length of time. Investors can’t cash in the securities with the U.S. government and retrieve their money whenever they want.

However, what investors can do is sell their U.S. debt investments to other investors. So what a holder of U.S. debt could do if they wanted to harm our country economically is sell a large amount of U.S. debt in the investment market. This would be called “dumping our debt” and would hurt the U.S. by forcing it to pay higher interest rates on any new debt. But this tactic is also unlikely because a large sale of U.S. debt investments would reduce the investment’s value and thereby also hurt the seller.

Now, on to the second question, about the status of the U.S. dollar. Since World War II, the dollar has been considered the “reserve currency” of the world. This means that many international transactions are done in dollars, and that dollars are usually accepted for payment anywhere in the world.

This has been the case for two reasons. First, the U.S. economy has been by far the largest in the world, so more economic exchanges are made in dollars than in any other currency. Second, the dollar has traditionally maintained its value against other currencies, so users know they won’t lose purchasing power by holding dollars.

Have these two advantages of the dollar changed in recent years? The U.S. economy is still the largest in the world — twice the size of the number two and three economies, China and Japan. Also – perhaps surprising to many – the U.S. economy has maintained its share of the world economy at close to 25 percent over the past four decades. The rise of Asia in world commerce has come at the expense of Europe, not the U.S.

However, the dollar’s value against foreign currencies has slipped, on trend, in recent decades. As an average against major world currencies, the dollar’s value is half of what it was in the early 1980s and one-third lower than a decade ago.

Some experts predict a replacement of or at least a sharing with the dollar as the reserve currency at some future point, but not soon. The most likely alternatives would be the euro or the Chinese yuan. While not disastrous for the U.S., this would mean somewhat higher costs for U.S. businesses and perhaps higher interest rates on dollar-denominated investments.

Should you be worried about these international trends? If you answer yes, then the next question is, where should you focus your concern? I recommend two areas: U.S. economic competitiveness and federal fiscal affairs. You decide if I’m right.

For more commentary from Dr. Walden, read here.

Get the latest news alerts: Follow WRAL Tech Wire at Twitter.