Is China Essentially a Credit Card for the US Government?
I asked this question after reading a comment left by a Facebook friend on my Facebook link I had posted:
First, destroy the schools, then eliminate the jobs, then blame Republicans who don’t want to give handouts to people whose lives the Liberals have intentionally ruined to secure their own positions.
Looks like what I’ve seen over the last forty years.
Wal-Mart is the biggest outlet for cheap Chinese goods. ell me again, who was on their board for a couple decades and who was the president she was married to that eased import restrictions on slave wage Chinese goods, forstering monumental growth of Wal-Mart during his tenure?
Of yeah, while we’re at it, let’s borrow back all that money from the Chinese to expand our government. They won’t get angry when we can’t pay anymore.
That got me thinking about the mess in which Obama and the Democrat Party have caused since they took the reigns of a successful economy after their electoral victories in 2006 and 2008. Since 2000, the Democrats have blocked any attempts by then-President Bush to reform Social Security, blocked any attempts by then-President Bush and the GOP to reform Fannie Mae and Freddie Mac and prevent the collapse of the housing market, used Fannie Mae and Freddie Mac to ruin the housing market, have quadrupled the deficit, have spent like an entire Armada of drunken sailors putting our children’s children’s children in debt even before they are born and have doubled the unemployment rate.
Now, I’m no economics genius, but I know that none of that is good for the economy. That said, I only understand the very basics of the economy, so I asked the following questions:
Let me ask a stupid question…
Is China basically like America’s credit card? Basically, our politicians want to spend $X, but don’t have the money. They don’t want to wait to save for it (collect tax money from American citizens), so they put it on a credit card (the Chinese government). The Chinese either (1) respect the American economy enough to think that we’ll be able to pay it back eventually or (2) know that lending this money to America enslaves us to them, in the same way the average person who puts too much money on a credit card is enslaved to the credit card company. Going with (2), this now gives China LOTS of leverage to negotiate basically anything with America. In the same way that a credit card company can threaten to ruin someone’s credit and life if they don’t pay the money back.
Now, the Trillion+ deficit is basically all on credit. Eventually, it has to be paid back, though. Well, the only way to pay it back is through tax collection on Americans, right? Well, Obama has basically put Trillion $+ on a credit card and using that money to make things *worse*. Higher unemployment means less tax money collected and more money given out by government for benefits.
So to my stupid question, how on earth is this ever going to turn around??? I mean, I have $3000 on credit right now + my Ford Escape lease for the next 1.5 years + my mortgage. Eventually, I have to pay all that back. I can’t just let it go forever. If I don’t pay it back, I lose my house, lose my Escape and my credit is ruined. In other words, my life crashes and is temporarily ruined.
Now, based on my due dates for my bills and my budget I have set up, I can determine when my crash date will be. I know when my income stops coming in (unless I land a job) and when I am no longer able to pay my bills.
Is there a date when we know this will happen for our economy? I mean with the deficit, spending, Social Security, etc, is there some date where we know our entire economy is just going to completely crash?
That’s really what I want to know. I have been using MS Money on my computer to track my finances since I started in the workforce after college. I plan my budget well in advance and so I always know my budget forecast 6 months in advance and can plan accordingly for expenses. Upon being laid off in DEC 2008, this became a priceless resource for me, as I could calculate how much time I had to find a job before I went broke and would be forced to lose my house and car. Even though my deadline is 3 months away, it is comforting to know that in advance, instead of not knowing and worrying about it 24/7.
So I am wondering if we have a similar forecast for the US economy. With Social Security going broke, Medicare/Medicaid going broke, spending skyrocketing and putting even more spending on the government ‘credit card’ (borrowing from China), while unemployment doubles, thus reducing the amount of income (taxes) to the government, someone must know of the deadline before our economy reaches its breaking point, right?
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