Ryan: ‘I Think The Sequester’s Going To Happen’

[jeff47]

33. The China boogeyman is rather tiresome.

First, the vast majority of US debt is owed to ourselves. You don't have to be another country to loan the US government money.

China bought up some debt as part of a currency manipulation scheme - make the Dollar worth more against the Yuan - in order to remain 'cheap' to US business. But that's like using a bucket to make water not run downhill - you can only move so much water before the flow is too great to overcome. So they stopped buying much in 2006. And the total amount they owe is a small fraction of our outstanding debt.

What did China buy? Standard US treasuries. Was there any sort of special deal/secured loan/other bullshit? Nope. What happens if they demand we pay it back now? Nothing. They pay out on a fixed schedule. If China wants to cash them in early, China can sell them to someone else. The treasury won't pay early.

But hey, good job catapulting the propaganda! "We're in hock to China" works great when cutting social services. Be sure to keep talking about it.