Why doesn't the concept of national debt apply on a smaller level to individual cities?
So the gist of national debt in my understanding is Nation A asks for aid of some kind from (or commits unintentional damages to) Nation B who later on deems Nation A owes them based on their interpretation of the ordeal, with varying layers of complexity.
Cities do that to each other too, right? Why do we never hear of a town or city urging that another town or city owes them, whether they're both in the same country or not?
And/or better yet, why doesn't national debt default on that kind of small level, where, instead of India saying "you owe us money, Israel", if all the money is coming from New Delhi and going to, say, Jerusalem, the mayor of New Delhi can just say to the mayor of Jerusalem "hey, get your billionaires to pay up"?
I know cities are not as sovereign as countries, but they're still valid units, correct?
That's not really what "national debt" refers to... national debt is literal borrowing: "hey who wants to buy some bonds from my national government so we can invest in our economy?" Someone buys those bonds with the expectation of getting the invested amount + interest back.
What you're talking about is most closely represented by "reparations" which is money owed by an aggressor to a victim state, and is only enforceable really by a stronger third party or by the aggressor losing the war.
As to why cities don't take on debt the same way: they do take on millions of dollars of debt for infrastructure, but usually they're loans from the federal government as opposed to bonds. The difference between city debt and national government debt is the national government controls its own monetary supply, meaning is defacto cannot default on its bonds. Cities can default on their loans, but typically the lender is the higher level government anyways so the repercussions tend to be political only. That's why worrying about "the national debt clock" is typically not meaningful, but your city borrowing 300 million for a new highway definitely is.
The monetary supply thing in particular is why using bitcoin or any other externally managed currency as a national currency is typically regarded as a bad idea.
And also the above statements get much more complex when dealing with multiple currencies like with Russia where despite it issuing the ruble, it can default on USD debt because the ruble/USD exchange rate is such shit.
Monetary policy is very interesting.
The reason I explained the first part that way is to accommodate to the "debt trap swindle" kind of counter argument that goes contrary to a foreseen sense of "owing".