How can we solve our problem with China?

[legoboy792]

We are currently in major debt with China, and we should take some action for this. Problem is how can we do this. My first suggestion would stop putting things we get from china on credit or stop getting things at all. if anyone has any other ideas post your comment now.

[devonin]

Re: How can we solve our problem with China?

As of April 2008, the total U.S. federal debt was approximately $9.5 trillion, about $31,100 per capita (that is, per U.S. resident). Of this amount, debt held by the public was roughly $5.3 trillion. If, in addition, unfunded Medicaid, Social Security, etc. promises are added, this figure rises to a total of $59.1 trillion. In 2007 the public debt was 36.8 percent of GDP ranking 65th in the world. The total debt is currently 66.5% of GNP.

Edit: Hmm. My numbers seem to have been a bit off. 5.3T held by the public, 44% of that (2.3T) is held by foreigners, 66% of the 44% (1.5T) is held by the central banks of other countries, especially China and Japan. Looking a little deeper into some US .gov sites, it seems as though the actual amount of foriegn debt held by China is 486B, still less than is owed to Japan, and only 9% of the total debt owed by the United States.

That's barely more than the US spent this year on defense (439.3B not counting Iraq and Afghanistan which was a HUGE additional expense) Cutting defense expenditure in half for two years (While still funding Iraq and Afghanistan the same amount) would basically erase the debt with China, so I'm not sure this counts as a catastrophic economic crisis.

[legoboy792]

Re: How can we solve our problem with China?

This might be an economical crises if China wants us to pay them now. what would we do then?

[omgitznpv]

Re: How can we solve our problem with China?

For what reason would they want us to pay them now? They can't expect us to pay back all the debt at once, anyways. How would it cause an economical crisis? If we do pay them back immediately, heck, it's possible we mind up borrowing from another country or such.
Or taxes.
Or something.

[devonin]

Re: How can we solve our problem with China?

This might be an economical crises if China wants us to pay them now. what would we do then?

By the same token that the US has borrowed a lot of money from other countries, they've also lent a lot of money in international aid, and so generally, has every first world country in the world.

Debts get paid back in small parts as countries generate surpluses (When they get a government that isn't say...obsessed with carrying out a ridiculously expensive war, and actually wants to concern themselves with -balanced- budgets and not rampant deficit spending) because if some country were going to go "Ahaha, we'll be jerks and call the debts!" all that would do is make everyone else call debts from everyone else, and they could probably cut a good 50% out of the world's debt just by transferring debts and cancelling things out.

Though in the case, specifically of the United States, especially given the current government, I woudln't be surprised to find that rather than risk bankruptcy and depression the US would at least consider just defaulting on China's loan entirely. Not much they can do about it, really.

[legoboy792]

Re: How can we solve our problem with China?

How could they default China's loan?

[devonin]

Re: How can we solve our problem with China?

China: Hey US, Pay us our money.

US: No

[Zythus]

Re: How can we solve our problem with China?

Go to court and officially state to China that the debt cannot be paid off.

But I'm very much skeptical about China's abrupt demand for all the loaned money to be paid back immediately. I'm not convinced that China would want to ruin or destabilize the friendship with the US, because China do very much require US investment or influence to achieve further development. Also, it is China's period of glory currently, with the Olympics coming up just months away. China wouldn't want another nation to glare at them "officially", especially with the bad publicity they are showered with now.

[legoboy792]

Re: How can we solve our problem with China?

Well say if we decide to help Tawain. Then couldnt China declare that we pay them back?

[Kinspin]

Re: How can we solve our problem with China?

I think we should cut spending on the Iraq war.
I don't see that happening while Bush is in office of if McCain assumes the office in November.

[devonin]

Re: How can we solve our problem with China?

Well say if we decide to help Tawain. Then couldnt China declare that we pay them back?

Yes they could. They won't, and even if they did, the US could pretty easily get away with just ignoring them.

Besides, the most important point is China's economy is booming right now, they are in no financial trouble whatsoever. As a result, if they tried to call the US's debt, the US would simply point out to the international community that China has no need for this money, and is obviously only trying to cause economic distress to competing economy, which would certainly not go over well internationally, especially coming from China.

[legoboy792]

Re: How can we solve our problem with China?

Okay, so if we did that the US would not have to pay. There would also be no consequences? Say that another country wants them to pay us? Then we would be in the same boat.

[devonin]

Re: How can we solve our problem with China?

Okay, so if we did that the US would not have to pay. There would also be no consequences? Say that another country wants them to pay us? Then we would be in the same boat.

What can any country, or even any consortium of countries actually -do- to the United States if they suddenly decide they don't like what the US is doing?

If your answer involves invasions or nuclear weapons, then you have no idea how global politics works.

[legoboy792]

Re: How can we solve our problem with China?

What can any country, or even any consortium of countries actually -do- to the United States if they suddenly decide they don't like what the US is doing?

If your answer involves invasions or nuclear weapons, then you have no idea how global politics works.

Well im not trying to go to war im saying that couldn't another country ask the US to pay up?

[esupin]

Re: How can we solve our problem with China?

China has bought a huge amount of war bonds, so they've literally funded a large part of the Iraq War and the US's other middle eastern conflicts. I'm not too worried about the national debt because it doesn't work the same way that it does with individuals. Technically, the US can be fine never fully paying back their debts. However, I still think that the US is being irresponsible with its money. Not good.

Also, I'm worried more about relations with Russia than debt with China. We're shoving NATO bases and missile defense systems closer and closer to them, and Bush seems to think we have some sort of right because we "won" the Cold War (which we didn't - when Bush Sr. and Gorbachev agreed to end it, they both agreed that there would be no winner announced). I mean, it's like Russia putting missiles in Cuba, Canada, and Mexico. We'd go nuts in the US.