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Is China about to do the United States a big favor, however unwittingly?
According to Bloomberg, China is considering whether to slow, or even stop, purchases of U.S. Treasuries. At $3.14 trillion, China holds the world's largest foreign exchange reserves. It is also the largest underwriter of U.S. debt. Financial experts and political observers have long worried that becoming financially dependent on an unfriendly and rival nation is not good for the U.S. in the long term.
Term - Beijing - Underwriting - America - Debt
In the short term, however, should Beijing choose to pull back its major underwriting of America's $20 trillion debt, it could force politicians to do something they have heretofore seemed incapable of doing: halt spending and start reforming or eliminating unnecessary and outmoded government programs.
Most of us who are not billionaires have had a "we can't afford it" moment when considering purchases for which we don't have the money. It usually doesn't take long before what was once considered essential becomes, upon reflection, nonessential. Not so with government. Most politicians see everything government does as essential and since they don't have to pay for anything with their own money, they are reluctant to cut spending, which they believe helps extend their careers.
Debt - President - Barack - Obama - George
Before he ran up the debt more than any other president, Barack Obama criticized George W. Bush for increasing America's debt. While a senator from Illinois and during a debate about whether to raise the debt ceiling, Obama said, "The fact that we are here today to debate raising America's debt limit is a sign of leadership failure."
Debt rose by $3.5 trillion in Bush's first five years in office, partially the result of the terrorist attack...
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