Saturday, January 22, 2011
By “we,” I mean us. Literally, you and me, as opposed to Congress which could order the pay off, or the Department of the Treasury which could just do it. More on this distinction in a moment.
You know how your relationship with a person, a friend or relative, changes when you let them do you a favor? Especially if you borrow money from that person? It does, doesn’t it. You lose leverage. You know it, and the other person knows it. It may, in fact, be why the other person offered or agreed to do you that favor in the first place, to change your public, if not private, attitude toward his or her behavior. It used to be okay for you to be openly critical of that creep in your department, until he covered your ass with your supervisor when you blew that assignment.
Pretty much the same is true for our relationship with China. As of July 2010, we, the United States, owed China an estimated $846.7 billion dollars, just over 20% of all the US Treasury securities held by foreign entities. Japan is a close second, holding an estimated $821.0 billion of those obligations, but we’re friends with Japan, a democratic capitalist state. Not so much with China.
Given our Government’s reluctance and inability to control spending and reduce our national debt, it’s a good bet that our debt to China will continue to grow, and our leverage – political, military and, most importantly, economic – will continue to decline. These two – increasing debt to an adversary and decreasing power to influence that opponent – are hardly unrelated. They are cause and effect, and don’t think China and the rest of the world don’t know it.
Is there anybody reading this who seriously believes that our relationship with China, and with other nations who are watching, has not been adversely affected by our dependence upon China to bankroll our national debt? Anybody? I didn’t think so.
So what do we do about it? As someone who believes that our government is pretty much lost in space, I think it’s time “We, the People” took a more active role in running our foreign policy. I think we should pay China off, now. Here’s how.
We owe China approximately $846,700,000,000. (It’s more impressive when you write it out.) According to the 2010 Census, we have 308,745,538 people. The simple, but not simple-minded math of all this is that paying off China will mean each of us putting up an average of $2,742, round numbers. No, it’s not chump change, particularly on a household basis. Presumably, higher income persons and families will pay more than this average, lower income families less.
And where will we all get this money? I suggest that we borrow it from our wildly profitable banking institutions which will cooperate with very low interest, long-term loans – or maybe we should take our banking elsewhere. Congress, for its part, can and must cooperate, if they want to get re-elected, by making the interest we pay tax deductible and agreeing not to borrow any more from China, or any other adversary state.
Radical idea? Sure, but then sometimes we need to be creative to solve problems which are way, way out of control.
We’ll not only save the roughly $40.26 billion in annual interest we’re currently paying them, which is an amazing $110.3 million dollars a day, we also get our national pride back and, with it, the leverage and resolve we need to do whatever’s best for this country. If that means being critical of a creep on the other side of the planet, so be it. If nothing else, it’s better that our government owe the $846.7 billion to the American people, than to a world competitor with whom we have fundamental political and social differences.