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Guess what? It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions.
Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.
Nothing happening in Washingto
As you may have read, the Chinese grilled OMB director Peter Orzag on the impact that the health care bill would have on the US fiscal position. As I have warned, the passing of the current bill by Congress is a negative for the US dollar and may trigger a re-evaluation of Chinese US Treasury purchases.
The massive increase in Chinese holdings of US dollars and US Treasury securities has two big potential problems. One is the United States government dependence on a foreign entity for loans. Two is the facilitation of borrowing to the United States that perpetuates a belief that massive and ever increasing borrowing can continue without a cost. Both contribute to a dangerous situation should a sudden shift in the structure occur.
Originally posted by Desolate Cancer
Remember it is our debt holders who would be financing this backwards attempt at universal healthcare, so they literally are paying to provide coverage for american citizens over their own citizens then.
This is about as much as many people
here at ATS know about US debt.
Who really owns most US debt?
Foreign Investment accounts for only 29% which
includes China, Japan and the rest of the world
China and others are buying US debt because, despite everything, the US is seen as relatively safe investment in uncertain times. (China also likes US debt because it helps keep Chinese exports cheap.) Countries that are a bit riskier will have that reflected in a sovereign debt rating and will have to offer higher yields. But they will still have buyers at those higher yields -- either private institutions or governments that are still net creditors.
Originally posted by SLAYER69
Joe Six pack tax payer is footing more of our debt than the Chinese
Obama: Debt Could Fuel 'Double-Dip Recession'
If you lie to the largest debt holder country, China, on what socialized health care will cost for the U.S. population it will come back to bite us big time financially as a nation.
Truth: There are many nations who CAN take our place...EU. It should be easy for them to make the transition but why dont the Chinese do it???
The United States is taking a multilateral approach towards world affairs and making "multilateral efforts and China is part of those efforts," he said. Therefore, "what this trip successfully did is what I think makes the United States and China read from the same play book on a lot of issues." Noting that the trip is "part of a process," he said it "can't be looked at alone, it needs to be considered as part of the process of the Obama Administration changing American foreign policy globally as well as with respect to China."