Economic Myth No. 1: China is bankrolling the U.S.

[LordBeaverbrook]

“Nearly all of our public debt is held by U.S. banks and by the American public. China holds around 10% of it and believe me they don’t think they are doing us any favors by investing in Treasury bonds. Yet you read in the paper that you have to treat China with deference because they are such important holders of U.S. debt. How did China become the owner of so much U.S. debt? It’s because Walmart bought a few hundred million dollars of things from China and had to pay them for it. So Walmart calls JP Morgan and puts those dollars in a China bank account run by JP Morgan in New York. That money then gets invested in Treasury bonds. The money didn’t disappear and go to China. The money is still in the U.S. economy. Foreigners own about $23 trillion of American assets, but Americans own about $20 trillion of foreign assets. If foreigners buy U.S. Treasurys, that is fine for the U.S. financial system as a whole. Regardless of the size of our trade deficit, which is a separate debate, it is still a myth that Asian countries are bankrolling the U.S. and that we need China to lend us money to pay for our government’s obligations. Countries that sell more goods and services to the U.S. than they buy from the U.S. end up with trade surpluses in dollars which must be held in dollar assets. These countries can only do three things with those dollars: buy U.S. goods, buy U.S. assets like government bonds, or exchange those dollars for another currency.”

I will be adding myths regularly and commenting on them to debunk the economic and financial ignorance on both sides (no, they aren't equal but there is quite a bit of ignorance on both sides, especially of macro-economics) so that perhaps we can make political choices going forward based on a bit more reality rather than fear and loathing.

[LordBeaverbrook]

“No nation can save its way out of a weak economy. If I save by spending less per week on coffee at Starbucks, then that employee at that particular Starbucks has less customers to attend to, which possibly means less hours worked, which means less money for that employee to spend. So I’m not spending anymore, and now neither is that Starbucks barista because his hours have been reduced. He might even lose his job. Investment has to come first and that will lead to savings. Unless someone spends more on something — whether its consumers, corporate investment, the government, or a healthy blend of all three — then GDP will not increase. Reducing spending and investment in order to save for a rainy day means the GDP will stagnate at best.”

[CuteOldGuy]

Where are you copying this from? BTW, it was Obama who lambasted GW Bush for borrowing money from China. He has kept it up.

[Whirlaway]

Obama called Bush's $4 trillion of debt "unpatriotic"....making Obama's $6 trillion in four years down right treasonous.

[ChoomCzar]

Originally Posted by Whirlaway

Obama called Bush's $4 trillion of debt "unpatriotic"....making Obama's $6 trillion in four years down right treasonous.

Is this the fat nerd who had the George Lucas avatar?! She thinks she's gonna school us righties?!..
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HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA!

[CuteOldGuy]

Yeah, it is, CC. He won't even credit his source. I guess he's embarrassed by it, or he wants to post somebody else's words to make himself sound smarter than he really is. Not the first time liberals have tried that on here.

[CJ7]

Originally Posted by CuteOldGuy

Yeah, it is, CC. He won't even credit his source. I guess he's embarrassed by it, or he wants to post somebody else's words to make himself sound smarter than he really is. Not the first time liberals have tried that on here.

get off your tired old ass and google it

http://www.forbes.com/sites/kenrapoz...t-u-s-economy/

[CJ7]

what? ... nobody on a hooker board can refute the CFO of BOA, and former President of a Chinese bank?


Im fuckin SHOCKED!

[CuteOldGuy]

The idea that we need to keep spending and spending to better the economy is too stupid on its face. It needs no refutation.

[CJ7]

Originally Posted by CuteOldGuy

The idea that we need to keep spending and spending to better the economy is too stupid on its face. It needs no refutation.

nobody spends a dime .. business sets record sales

[CuteOldGuy]

Gawd, you comprehension is worse than ever today. Go fill your prescription.

[CJ7]

Originally Posted by CuteOldGuy

Gawd, you comprehension is worse than ever today. Go fill your prescription.

yet again your soooooooo typical response ... the world is an idiot, except you

Id ask if you got tired of saying the same shit day in and day out, but I know the answer, better yet, I know the reason

[CuteOldGuy]

No, the world is not an idiot. The comment was directed at you, specifically. More proof that your comprehension skill are deteriorating daily.

[CJ7]

go spread some doom and gloom and have some fun

[CuteOldGuy]

If by that you mean, tell more people the truth about Obama, sure I will! Thanks, CBJ7!