By Allan Sloan
April 25, 2011

FORTUNE — There’s been a lot of hand-wringing and posturing over Standard & Poor’s announcement that it has changed its outlook for the U.S. Treasury’s long-term debt to “negative” for the first time since it began rating Uncle Sam’s securities 70 years ago. To many people, it feels like a judgment from on high about our government for spending so much more than it takes in.

But there’s no reason to freak out about the U.S. Treasury losing its triple-A credit rating. The real thing to worry about is what the dollar will be worth in the future in terms of the goods, services, and commodities you’ll be able to buy with it.

You’ve got to love it: Republicans who never saw a George W. Bush national debt-increase request they didn’t support are now alarmed at S&P saying there’s a one-in-three chance it will downgrade the U.S.’s credit rating within two years. Democrats, who rightly fussed about the costs of Bush’s massive tax cuts, two unfunded wars, and unfunded Medicare prescription drug benefit, insist that things are going to be okay under the current Democratic administration.

To be sure, S&P and its biggest competitor, Moody’s (MCO), haven’t exactly covered themselves in glory during the past dozen years. They facilitated the housing bubble with their clueless (and profitable to themselves) ratings of mortgage-backed securities, and didn’t catch on to the goings-on at the likes of Enron and WorldCom until way, way too late.

Given this record, I suspected a major PR motive here, possibly even a political one. But after speaking to Nikola Swann, S&P’s director of public finance and sovereign ratings, I think it’s a purely financial decision, totally removed from D.C. politics. As is Swann, a Canadian who’s based in Toronto. Swann told me that S&P intentionally uses an international committee to rate the debt of 127 national governments from Abu Dhabi through Zambia.

I think S&P has got the right idea in treating the U.S. government as just another sovereign credit rather than as some sort of “exceptionalist” borrower that’s not subject to any rules of the financial marketplace.

But even if the U.S. Treasury debt is downgraded, there’s no chance of the government defaulting on its debt absent Washington doing something incredibly stupid, such as refusing to increase the national debt ceiling.

The reason is that the U.S. government isn’t a company that has to worry about attracting enough borrowers to roll over its debts, the way even the most mighty corporate borrower had to worry during the 2008-09 financial panic.

Unlike a GE (GE) or giant bank, the U.S. government is borrowing in a currency — the U.S. dollar — that it can print. And there’s the Fed, which has been indirectly funding a significant part of the federal budget deficit through its “quantitative easing” program under which it’s buying $75 billion of Treasury securities a month. If all else fails, the Fed could fund the government directly.

This puts the U.S. in a whole different situation than, say, Ireland or Portugal. They borrow in euros, which neither the Irish nor Portuguese central bank can print. Only the European Central Bank can do that.

In the long run, of course, the U.S. debt might be so excessive that foreign creditors would insist on lending only in a currency other than the dollar (whatever that might be). “Ultimately, as monetary flexibility is lost, that becomes a possibility,” says Swann of S&P. However, he adds, “We don’t expect that to happen any time soon.”

So if the U.S. defaulting on its debt isn’t a problem, what is? The same problem I’ve been writing about for years — that even when you’re the U.S. government borrowing in its own currency, there are consequences to excessive debt. Unless the U.S. defaults on its obligations, interest costs get higher and higher, putting pressure on the budget. Borrowing all this money from all over the world — foreigners own about half our publicly-traded Treasury securities — puts downward pressure on our currency’s value. No one knows for sure, but it’s possible that this is a factor in the price increases of gold, oil, and other “hard assets” in terms of dollars.

So don’t worry about debt downgrades, folks. Worry about the debt. And about the way that we’re subsidizing borrowers and screwing savers by keeping Treasury interest rates ridiculously low. Compared to these things, S&P’s “negative outlook” is barely a rounding error.

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