When discussing Japan's debt, most people get caught up in the issue of fiscal solvency. As everyone by now knows, Japan has a very high level of debt versus gross domestic product:

This attention-grabbing number — about twice the level of the United States — often gets people asking whether Japan will default. Some believe a default is likely when the country runs out of domestic buyers for government bonds, causing interest rates to rise. Others think the Bank of Japan can simply print money and buy government bonds without causing devastating hyperinflation. Shrewd observers point out that Japan's debt isn't quite as large as the headline number suggests, since much of it is held not by the public but by various arms of the Japanese government.

The solvency question surely is an important one. But it's only one part of the larger issue. Since the vast bulk of Japan's government debt is owned by Japanese people, the question isn't about paying back external creditors. It's a matter of distribution of economic resources among the Japanese people.