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National Debt

Owned by China

  • February 27, 2009

    While “Made in China” labels adorn almost everything we, as consumers, purchase, China has another label that is less frequently discussed but with a much more consequential distinction: the largest buyer of U.S. debt in the world.

    In late 2008, China owned over 22% of all of the U.S. Treasury securities sold, which enable the U.S. government to spend more money than it has.  While overspending is not new to the country, it’s been going on since almost its inception, the levels of current debt are truly staggering and the fact that a country with whom we tend to be in ideological conflict with has such control over the future of our country is alarming.

    While some will argue that the ownership and selling of such debt is fairly irrelevant since the securities are likely to never be “cashed in”, instead just rolled over into a new structure, China or any other country owning U.S. debt (which can also be resold by purchasing countries), could easily hold our nation hostage by threatening to demand payment on such securities unless we do X, Y, and Z.

    This leaves our country in a potentially perilous situation where we would be paralyzed by the specter of what could be an economic end-all to our nation.

    The only way to prevent such situations is to get the budget and our national debt under control, and fast.  Vice President Dick Cheney’s assertion that "deficits don’t matter” rang hollow to economists and intellectual fiscal conservatives when uttered, but Congress failed to recognize the empty din and helped escalate our nation’s debt into the trillions for the first time in history.

    President Obama’s spending plans will further escalate our debt unless the tough choices are actually passed instead of just talked about, and taxes either rise or services decline.

    As the new legislation aimed at correcting our economy takes shape, we must remain vigilant to ensure that any and all taxpayer money is spent wisely and on programs that will pull our economy out of the downward spiral it finds itself while limiting our exposure to outside influences.


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