Economics 101 - Help me

[SwampDawg]

OK, the Chinese market is tanking. Seems like this will make it unlikely that the Chinese government will be willing to lend us more money to pay our current interest debt to them. If that is the case, what is our big-spending government going to do? If the Chinese won't, who will? Will we be forced to (gasp) live within our means? Bankrupt the top 10 percenters and take all their money (which will help us for about a week?) What's a government to do if it can't borrow money to buy votes?

 

[Delmar]

OK, the Chinese market is tanking. Seems like this will make it unlikely that the Chinese government will be willing to lend us more money to pay our current interest debt to them. If that is the case, what is our big-spending government going to do? If the Chinese won't, who will? Will we be forced to (gasp) live within our means? Bankrupt the top 10 percenters and take all their money (which will help us for about a week?) What's a government to do if it can't borrow money to buy votes?

Yeah, this should end well.

 

[Hump4Hoops]

I don't know what'll happen, but I'm sure you'll need milk and bread.

 

[Wicked Pissah]

Google exactly how much debt we owe china. China doesnt own our debt, we do.

So basically, nothing.

 

[Hump4Hoops]

Also, Japan owns just as much as China does, but nobody talks about it.

 

[drt7891]

Can we borrow money to buy yeti coolers and salt life stickers?

 

[seshomoru]

The market is gonna go a little nuts then calm down.

This isn't a systemic issue with the US Economy. It's a China problem. We'll be just fine.

And trust me. The US Treasury is still the most demanded security in the free world. We have a strong economy and a somewhat level headed government (save the debt ceiling ******** that pops up from time to time). There is no shortage of people who want buy our instruments. WE owe 2/3 of it to ourselves anyway (citizens, banks, corporations, the FED).

I know you wanted to make a snarky post about the big bad Obama administration government, but it'll be fine. And besides, you'll get a new person in 2017. So congrats! You got him out of office.

Also, Federal governmental monetary policy isn't exactly Econ 101. It's a wee bit more complex than the simple supply and demand graph.

 

[Digging dog]

Can we borrow money to buy yeti coolers and salt life stickers?

Back to Igloo & Coleman.

 

[Temple of the Dawg]

Great call....you fail

Google exactly how much debt we owe china. China doesnt own our debt, we do.

So basically, nothing.

China owns $1.26 Trillion in US Treasuries, which is over 20% of all foreign held US debt and 8% of our overall debt. So yes, we do owe China. Japan is a close second with $1.23 Trillion. That much debt owed to China can have a major impact on our economy if they start dumping our debt which will drive up interest rates.

http://www.cnbc.com/2015/05/16/china-tops-list-of-us-foreign-creditors-once-more.html

http://money.cnn.com/2015/05/18/news/economy/china-us-debt/

https://www.nationalpriorities.org/campaigns/us-federal-debt-who/

 

[archdog]

That is well stated.

 

[TheStateUofMS]

I don't think you understand things fully and have been listening to Ron Paul too much. I did a write up that explains things in a pretty good manner without getting too long...even tho it is a little lengthy in another thread "OTon't check your 401K balances" that was started earlier today. Go read it.


We owe China like $1.5T. Yes that's a lot, but also not enough for them to have leverage over us. Those bonds are also due in time, it's not like they all come due at once We have an $18T economy. If the US actually started to care, or our policy makers did, we could do some serious damage of paying down debt...if we wanted to. See Amazon. They have been spending erratically for years, but they make so much money, the Street gives them the benefit of the doubt and they can turn off the spending spicket and be profitable. Google just did this and their stock rallied. America could too if we had the will to do it.

Also, China depends on us more than we do on them. We have way more leverage over them than they do us. The one tool they really have is devaluing their currency more which is what Trump keeps talking about.

 

[RickyWadePhilpotDVM]

This.

Google exactly how much debt we owe china. China doesnt own our debt, we do.

So basically, nothing.

Japan owns more of our debt than China as of this April, but most US Gov't debt is held by Americans.

Nice to see someone actually know what they're talking about on this board re: economics.

 

[tenureplan]

Take your snarky liberal arts degree elsewhere.

 

[AROB44]

devaluing their currency more which is what Trump keeps talking about

But most of Trump's supporters have no idea what devaluing currency even means.