We are just sitting here burning our seed corn in our SUV's, borrowing to buy made in china garbge at walmart, target, and ebay, and we'll be SHOCKED and SURPRISED to find out we've sold the total worth of the nation to China and OPEC, at a rate of 6% more each year, till there is nothing left to borrow against. 5 yrs max, IMO THEN WHAT? LOL
I wouldn't argue with any of that, but you've left out the $9 trillion of govenment debt and probably another $9 trillion of dollars out there running around waiting to be cashed in (spent or traded for a more reliable store of value). Because nobody else worries about it, we'll also ignore the $59 trillion of promises made that can never be paid. All those IOU's are the result of living beyond our means by borrowing from our trading partners instead of trading with them. There wouldn't be any problem with China if they were trading with us for goods and services we produce instead of just lending us back the money or buying our companies with it. A study of the history of how fiat currencies collapse and the ramifications on the people caught in the crossfire is worthwhile. I feel we are on that slippery slope. The question is how will our children survive the mistakes, and what standard of living should they expect to have?
I didn't mention the federal debt because it is insignificant. It's just a nominal figure only useful for political campaigns in hopes of altering policy. The interest payment on debt in relation to national income is what matters, and that is not in danger in the least bit. The Gov. has no intention of paying off the debt, nor should they. The national debt has risen since the 1800's and will continue to do so for many years to come. The US Gov. is the largest holder of treasury debt not foreigners. Nobody is going to "cash out" as you say. The US is a sovereign nation, therefore, holding on to US debt is a sound investment, especially for foreigners. Deficits which spur economic growth through R&D and increased production is a sound business model. Again, when we no longer create the ideas, or have a negative GDP, then we will have an issue. But until then, I'm not passing around a collection plate for the United States. This government prints money, literally, because it can. I for one wouldn't want the US to become the leading manufactures of the world. Wages would go down and taxes would be high. Nobody will make a pair of Nike sneakers for $2/hr. here in the states, yet demand for Nikes are strong abroad. The US creates the design and asia manufactures it, but it all comes back to america.
now it is obvious that the relationship between the chinese and the americans has changed from one of hostility to friendship
And trees will grow to the sky... Argentina thought the same thing at one point, and they weren't the worlds reserve currency.