China lashes out against US bill aimed at currency manipulators It is sad it had to come to this for the US to start looking out for its best interests. The only way to restore the US economy, good jobs and the middle class is to bring manufactuing back to the United States. China is threatening a "trade war"? The trade deficit with China has been more than $2 trillion over the last 10 years. Why would we worry about a trade war?
We are a debtor nation and most of our debt is owned by China. We need to "pay it forward" and not continuously borrow our way toward affluence. At 1.1 billion people, China is the big kid on the block grasping for every resource. How to beat China? Get off oil, become more sustainable and self sufficient. China is on the verge of social turmoil - there is a preference for males and there is a shortage of females. We need to emphasize slow food, slow money and invest in ourselves.
I agree that the US needs to become more sustainable and self-sufficient and import less oil, but what does that have to do with China? Our problems with China have nothing to do with the consumption of imported fossil-fuels.
Our problems with China have everything to do with the consumption of imported fossil-fuels. If we IMPORT fossil fuels, we have to pay for it. We pay in dollars. The worth of one dollar depends on the market. We're a debtor nation. China isn't. Thus.....China has LOT more rudder input over the worth of 1.0 USD than we do....especially if they stop buying our debt. Nobody buys our debt..... we go "Tango-Uniform." Pretty easy stuff, really. All of those headlines are posturing for the studio audience. We have about as much chance of intimidating China as we do of reducing spending and fixing the tax code. It may happen someday....but I kinda doubt it's going to happen soon.
Baloney. It is time to have the showdown and tell them to turn the boats around. The ONLY hope the US has for paying off the Chinese and the Japanese is to start running a trade surplus, any other solution can really be reduced to "smoke and mirrors". If everything that we are to import between now and 2020 suddenly was manufactured in the US, think about how many jobs that would create and how that would affect every US citizen's standard of living.
You're certainly entitled to that opinion...but we still have to buy our energy. No energy....no factories. We don't have the capacity with domestic reserves. We have to pay for energy. We don't HAVE any real money to pay for it with. The Arabs and Persians have been a trading culture since before Christ. It's in their DNA. They do not take checks, and they do not take IOUs. You can bitch about solar, Iraq, Bush and all of the other daffy things you want to, but that does not fill ULCCs (tankers) nor does it pay for crew or cargo. If we try to pay for a tanker load of the black gooey stuff, what do we use??? Dollars? Yes and no. They're dollars now, but they were yuan a few microseconds ago. Right now $USD 1=0.156 Yuan....more or less. What happens if our good buddies, the Chinese, start to play with the decimal point? Yeah.....they'd take it in the shorts for our debt, but they'd also be able to buy all of the oil they'd need...and we wouldn't be able to buy enough to run our cars let alone build all of these gee-whiz factories. That's what it means to be a debtor nation. That's why I used to vote for a lot more Democrats than I do now. Great bunch of folks!!!! You just don't want them running your family store.
I agree, but NOW is the time to draw the line in the sand with the Chinese. Do you think the situation will just get better on its own? I don't think the Chinese are suddenly going to wake up one morning and say "we have enough, it is not fair to keep targeting the US industires and taking their money". NOW is the time.
Unless we go state run command economy and the average american agrees to take a 50% downgrade on his/her standard of living, no chance we'll win. We tout our freedom, free market economy, innovation, blah blah but in the end China's going to eat our lunch and boot us off our hegemony throne. Fine with me. Maybe Great Britain should draw a line in the sand and tell the USA to stop encroaching on their interests.
China owns us. We dug our own hole when we decided to pay for government services by borrowing (with the full intention of leaving the debt to the next generation) rather than by paying taxes. We decided to fight wars we could not pay for, and we decided to cut taxes on the rich, and beg the Chinese (and a few others) to lend us the money. We got pretty good interest rates, because the dollar was so strong, so we just kept borrowing more and more. We could fix it easily enough: We could start paying more taxes, and pay off our debt. We could probably be debt-free (or at least debt-manageable) in a decade. Clinton paid off Reagan's debt in his two terms in office. But as long as Americans refuse to pay taxes for the services they demand, and as long as politicians are too wimpy to tell it like it is and provide leadership, it won't happen, and we'll end up a third-world country. We've got resources, and capabilities. But we're too damn greedy to live within our means as a nation, and so we've got no choice but to let China have its way, because China owns us. And we're just digging our hole deeper and deeper.
I'm a Clinton fan, but need to correct (or maybe clarify) what you're saying. When Clinton was in office the country did run a surplus for at least one year, maybe a couple years (I can't remember). The surplus was used to buy back some T-Bills and reduce the debt, but it didn't come close to paying off the debt.
Plus Clinton wasn't wise with spending as much as he fell into a tech bubble (that later popped). Prosperous times for our nation's workforce mean more revenue, which we can then use to pay down debt. It was true in Clinton's day and it's true today. What sucks for Americans is that we convinced ourselves during our tech bubble that it was okay to lose manufacturing to China since we had all these great tech jobs! Unfortunately, the bubble popped and, on top of that, the offshoring groundwork we laid for manufacturing is now used to ship our tech jobs to places like India! It's interesting to note that even as western economies crumble, Asia is still booming (just at a slower pace). There's a reason for that, and the reason is trade surplus and jobs! On that note, I agree with the OP. America needs to take a stance against China et al and finally deal with their currency manipulation and our massive trade imbalance.
Is the problem China or the US? There are a lot more countries that are quite capable of providing cheap labor and government policies that favor them. Things to consider: 1) China has so much of our debt because our spending is out of control. Hard to blame that uniquely on China. Japan also has a big chunk. 2) Did China decide to have all our businesses concentrate entirely on the next quarter's profit vs. long term planning? 3) Did the financial crisis involve China or was that entirely our own doing? China absolutely sets up their national policies to reflect their own priorities. I have yet to see where they have done something that the US would not have done in the same situation. Time to clean up our own mess before we begin blaming the easy targets outside our borders.
Most of our debt is NOT owned by China. They have a bit over a trillion. While China is the largest foreign US debt holder, MOST of our debt is US owned with a significant part coming from the social security trust fund. I'm not sure how you all think China owns us. We mostly own ourselves...Look at the numbers.
"China owns us" is a myth. China and Japan have similar shares of the debt, and yet no one runs around saying "Japan owns us" (at least not since the 80s.. btw how did that turn out?). The largest owner of the debt is the US government. A majority of the debt is held domestically.
When I say that China owns us, I do not mean that China owns a majority of the equity in our economy. I mean that China owns so much of our debt, and we are so dependent on the Chinese to continue buying our ever-increasing bond issues, that they have all the leverage in negotiations, and we have none. We cannot tell the Chinese to change their fiscal or monetary or trade policies because if they stop buying our debt, or if they start dumping our debt, we will be screwed. Some folks, like Malorn, think that all we have to do is somehow "force" the Chinese, Japanese, and others, to stop underpricing their exports, so that U.S. companies can compete. Well, leaving aside the question of whether or not cheap imports are the problem, we cannot "force" them to change their policies because we are so dependent on them to finance our irresponsible borrowing.
So Daniel under your reasoning, China will just continue to take the US job, by job, brick by brick, dollar by dollar until they are the worlds superpower? Right now there is much allusion to the Chinese economy, NOW is the time to stop them. As for US companies competing? There is now way. The Chinese economy is controlled by a central government and nothing happens without a plan. right now if you are in the US and you are in an industry that the Chinese decide to enter, you are finished. Is that trade? What do you think is building the Chinese military? Our money!
I don't buy your defeatist attitude. There is no freedom, free market, inovation in China. Are you kidding me? Great Britain blew it, we still have the power to do what is best for the citizens of the United States of America.
How? I'm not exactly one of the biggest fans of the CHICOMs, but I don't disparage people that I have disagreements with, just for the pure joy of slinging piss. China does have a limited free market, and they are innovating. So.....how do we force another super-power to stop diddling with their currency? I like some of the "build more factories" thing, but right now America really isn't the place I would pick to plunk down a few gigabucks to build one in. My new factory might just turn a profit, and make me 'rich'. Right now, 'rich' is a four-letter word in America. Of course, my beloved government could "pick some winners and losers" to help out, but both parties have a less than stellar record of doing that.
