Turns Out China IS Lying About Everything

[jeff47]

36. The entire point is the money wasn't borrowed from China

It was borrowed from us. We loaned it to the government.

The goal is to cut social spending in order to finance tax cuts. You can't cut social spending if you're just throwing starving people on the street - voters won't go for it.

Instead, you claim we owe a ton of money to the "yellow menace". If we don't cut spending now, we're "selling our country to China". And you just ignore inconvenient facts like China hasn't bought US debt since 2007.

As an added bonus, you can get the left on board with "cut spending now" by claiming various right-wing goals were financed via China. Now the "China Owns Us" hysteria is bipartisan, making it even easier for Republicans + centrist Democrats to cut social spending.

Btw, why'd China buy so much US debt? Currency manipulation. The trade deficit with China means the Renminbi should be rising vs. the dollar. A strong Renminbi and weak Dollar would create a major crisis for China - their entire economy is based on selling cheap crap to everyone else. Buying US debt strengthens the dollar vs the Renminbi....for a while. The problem is it requires buying more and more debt to keep the effect going. And we don't actually produce enough debt for China to keep doing that. Which is why they stopped in 2007 and have been using other techniques to try and keep their currency low. These methods are less effective, which is one of the reasons why China's economy is starting to stall.