I am not clear on the amount held by the UK gov so you may well be right, my understanding was that of the $338B or so held by UK based accounts 239B was held by the UK gov but I may be wrong. http://en.wikipedia.org/wiki/List_of_countries_by_foreign_exchange_reserves http://en.wikipedia.org/wiki/United_States_public_debt
I think we can print $ increasing M-1 money supply as long as the dollar is steady against major currencies (they are in as bad or worse shape than us) and prices remain stable. This is not the answer though. In times of war gov'ts invest or go into debt/deficit's to finance the effort. Today we are investing in economy and severely distressed assets, not to defeat a threat with no upside other than democracy. These will pay off in fairly short order, 2-5 years. One thing that we have not gotten down is surpluses in good times. Some argue that no US gov't bonds/debt would leave a hole in market fundamentals, so we tend not to run surpluses. We have been in effect, I believe, become reverse Keynsians; lowering taxes during good times and raising them during bad. It's not like the world is not concerned about our debt, CDS on 20yrUST went from 6 on 1/1/08 to close 2008 @ 61. This while the rates on these plunged. This means that 'insurance' (implied default risk) on US debt went up ten fold. One of Russia's leading university analysts (ex KGB analyst) is concerned the US will go under and split into 4 differing countries in a 'bankruptcy' reorganization. He said this not to be anti-US, but as a major concern for Russia. Look what has happened to them this year. Under his scenario they would not survive at all, implying something out of Mel Gibson's Mad Max movies for the future of Russia.
Implications in the UK So what does all of this mean for us? The increasing loss of confidence in the US matters - because if investors think the US is in danger of going bankrupt, what must they think of us? Britain has built its economy on debt and its economic growth has also been fuelled mainly by a property bubble. If investors start demanding higher returns for the risk of buying US debt, then believe me, they are not going to see gilts (government backed bonds in the UK) as a risk-free alternative. The fact that Gordon Brown and Alistair Darling have been forced to rewrite the government's fiscal rules to allow them to borrow even more money will merely reinforce that opinion. The government has already broken its self-imposed rules and we're only at the very start of a downturn that follows on from more than a decade-long boom. Foreign investors might start to ask themselves - where did all the money go? And why should we give them more? That'll do two things - push up the cost of borrowing for the government (and by extension the rest of us) and push down the value of sterling. They used to say that when the US sneezes, the rest of the world catches a cold. Well, America's now got a bad case of pneumonia - which suggests the British economy is heading for the undertaker. http://money.uk.msn.com/investing/articles/john-stepek/article.aspx?cp-documentid=8935191 So if this is the path that the global economy takes doesn't it mean that the US will be relatively better off than most other countries? http://en.wikipedia.org/wiki/List_of_countries_by_external_debt
These are all incorrect figures. Don't go believing everything you read. The European Union is not an economy. Latest GDP I saw of US was around 14.5 trillion.
Funny thing.. liberals love to talk about savings for the "middle class" (which is the traditional lower middle), but it doesn't go both ways? The vast majority of the $12k/yr stat is paid by the wealthy (and large corporations), so the impact for an average "family of four" is significantly less. Not saying this isn't bad or anything, but it's a skewed statistic.
AI will also cure the world from inefficient humans too, and "their kids" will read about humans as we do about monkeys.