Skip to comments.China demands U.S. 'live within its means' [ Not even the Commies call for more revenue AKA taxes! ]
Posted on 08/06/2011 5:43:45 PM PDT by NoLibZone
China, the largest foreign holder of United States debt, said Saturday that Washington needed to cure its addiction to debts and live within its means, just hours after the rating agency Standard & Poors downgraded Americas long-term debt.
Though Beijing has few options other than to continue to buy United States Treasury bonds, Chinese officials are clearly concerned that the countrys substantial holdings of American debt, worth at least $1.1 trillion, are being devalued.
The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone, read the commentary, which was published in Chinese newspapers.
Beijing, which did not release any other official statement on the downgrade, called on Washington to make substantial cuts to its gigantic military expenditure and its bloated social welfare programs.
Beijing does have its own worries, like soaring inflation and housing prices and an overheating economy. Policy makers are also trying to deal with the accumulation of huge foreign exchange holdings. Trade and current account surpluses have helped China accumulate the vast foreign exchange reserves. It has invested much of those reserves in United States Treasury bonds, largely because the American market has long been considered the safest and most liquid bond market in the world.
Analysts say that China can also buy bonds in the European and Japanese markets but that those two markets are not big or liquid enough to absorb Chinas fast-accumulating foreign exchange reserves.
But because China has about $3 trillion in foreign exchange reserves, there are few places big enough to invest those holdings safely outside of United States Treasuries, even though it looks as if they may lose value.
(Excerpt) Read more at nytimes.com ...
".When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%.
However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015"
Commence the trade war.
Opening volley: 100% import tariffs.
Stop messing around. America first.
Sure right away. Obama is well underway in this endeavor, he's got you covered. The humiliation that this administration has brought upon the people of America makes my stomach churn.
Sure just put people to work making that crap, the Chinese send over here,That Should about do it!
And “investments” in education and infrastructure mean more spending.
The truth never changes. The borrower is always the slave of the lender.
Since they are commie do you think this may finally get the libs to listen?
I just checked over at DU.
What I found over there, is that the left is just as wimpy about doing something real about trade.
If not now, WHEN?
A good old-fashioned trade war is EXACTLY what will be good for American jobs.
So why is everyone afraid to say so?
Why are both parties silent on such an obvious response?
Why do you suppose, Trump was finding such response to his momentary campaign?
Because he say the Emperor is not wearing clothes.
What are we waiting for?
You’ve got that right...how many $billion a day are we paying the Federal Reserve?
What's happening next Monday?
You know what would help us China. We should take our manufacturing out of your country and bring it back to the US!!
I bet at Du et all their lament is that we don’t raise taxes.
Even the Chicoms say that’s not the answer.
We really need to stop speaking of that rhetorically.
And take concrete steps to do so.
Stop messing around. America first.
“Stop building up your military, and cut welfare checks so the cities explode” sounds like sound advice from the only real competition America’s got.
Tariffs are not taxes.
America became strong, with tariffs.
It’s the only tax, we should have.