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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (2388)	9/12/2008 8:04:33 PM
From: TimF	Read Replies (1) \| Respond to of 86356

40% of our borrowings come from China to finance our budget deficits. After the last 8 years of that Over the last 8 years our federal debt to China has increased by about $45 bil a year. (To about a half trillion total now) That's about a percent and a half of 2008 or 2009 spending (slightly more for earlier years with lower spending), and a noticeably higher but still much lower than 40% chunk of federal borrowing during that eight year time frame. Also again your conflating the budget deficit and the trade deficit. They are not totally unconnected, the budget deficit has some effect on the trade deficit, but they are seperate issue. As for China buying US assets that isn't a transfer of wealth they are paying for them. It would be a transfer of wealth if we gave the assets to the Chinese for free. When have we seen this before? Remember in the 80's when the Japanese were doing the same thing? And I remember all the hand wringing and even semi-apocolytic predictions about it, none of which came true. The whole "China is buying up the US" meme is seriously overblown. The vast majority of US assets are owned by Americans. As for foreign owners, the British and probably the Japanese own more than the Chinese. As our financial markets are melting down, who do you think is providing the liquidity? The US government? Yes, but only after they borrow hard cash from China to do so. Melting down is far too strong of term. Also Chinese money represents only a small part of the bailout money or any other federal spending. Once again, a strong majority of government spending is covered with taxes. A strong majority of what isn't covered is borrowed from Americans. And a majority of the rest is borrowed from people other than the Chinese.