Sunday, March 8, 2009 4:26:30 PM
The debt doesn't give China any power over us, either, contrary to popular opinion. They can`t "call" the debt, like you always hear about. And in fact, the debt gives us quite a bit of power over China. The worst they can do to us is dump their US Treasury Bonds, which, being the surest investment known to man, will be quickly gobbled back up by other banks, and, worst case scenario, perhaps force us to sell bonds at a slightly higher rate for a little while, perhaps costing us a few billion dollars. China, on the other hand, will have lost perhaps hundreds of billions due to having to sell bonds on the cheap, and will have lost the only thing keeping their currency from suffering massive inflation. The damage China would suffer from dumping their bonds could be as bad as total economic collapse.
Sunday, March 8, 2009 4:22:27 PM
People really don't understand the debt. At all. It isn`t a big deal.
You get that? IT ISN`T A BIG DEAL.
Once more: THE US NATIONAL DEBT IS NOT A BIG DEAL. IT IS NOT A SERIOUS ISSUE TO ANYONE BUT THE IGNORANT.
Fact is, the US GDP has been comfortably outgrowing the debt for pretty much all of our history (aside from spending (and thus debt) spikes like wars and this stimulus package), and currently our debt to GDP ratio is, in fact, one of the smallest in the first world. Britain, for one, is around five times as heavily indebted, per capita, as the US is, and because Americans have higher incomes, the overall ratio is even worse.