**This post was started Tuesday but I was consistently interrupted and so stopped working on it. So, two days ago was Fat Tuesday. Today is not. OK? ****
Today, for those of you out of the loop, is Fat Tuesday. Today we’re all supposed to party like it’s 1999 so that tomorrow we can decide to not do something for the Lent season. Or something like that. You know, sacrifice your vice type stuff. Of course, for those that are Catholic it means something totally different, but I’m not Catholic so I really don’t know what that different is.
So, I was thinking of what I could give up for Lent (even though I’m not Catholic) and thought “Aha! Politics!” So, my plan was to block all of my favorite political sites and be done with them for a few weeks. Mwahaha!!
Anyway, that was until my history professor with his doctorate decided to be a stupid ass again1 . I’m seriously considering dropping that class. So,
tonight Tuesday after we watched a stupid “documentary” (which wasn’t) he decided to tell us how the relations between the U.S. and China are starting to resemble those of Britain and China just prior to the Opium Wars. He asserted that Secretary of State Hillary Clinton was going to go to China next week2 to ask China for a loan so that the Obama administration could fund the stimulus package thus putting the U.S. in massive debt to China.
He failed to mention– this Mr. I’ve-got-a-doctorate-in-history — that the U.S. debt to China predates Obama and is already nearly $700 billion. Let’s look at some evidence, shall we?3
This article in the New Yorker was published in April 2005. Before Obama and before the Democrats took control of Congress.
[…]Doomsayers have been predicting for a while that the profligacy will lead to serious trouble. So why hasn’t it?
One answer is that Asia won’t let it. Last year, Asian countries invested almost four hundred billion dollars in the United States, mostly in government bonds. China is effectively taking most of its excess national savings and lending it to the United States. The Japanese, who despite their creaking economy remain flush with savings, bought a quarter trillion dollars of American debt last year, even though the interest is lousy and the assets themselves are losing value. More than any other nation in history, the United States depends, economically, on the kindness of strangers. Right now, Asian investors appear very kind.
I’m sorry, StupidProfPants, you were saying?
But wait! There’s more. What would happen were China and Japan to suddenly decide that they just don’t love us anymore and stop investing in the U.S.?
Of course, the Chinese and the Japanese could decide that the costs of the falling dollar are too great, and suddenly stop (or, at least, cut back sharply) their lending to the United States. This would lead to a so-called “hard landing” for the U.S. economy: high inflation, punitive interest rates, collapsing stock prices and housing prices. It would also lead to bedlam for China and Japan. Their best customers would effectively be unable to afford their wares. To paraphrase John Paul Getty: If you owe the bank a hundred dollars, you’ve got a problem. If you owe the bank three trillion dollars, the bank’s got a problem.
If China decided to pull out all interest in U.S. Treasury bonds, our economy– and theirs — would collapse. Completely. We’re pretty much dependent on each other. At least we were in 2005 before Clinton became Secretary of State and went to beg for money.
But did she do that? Hm, I guess that would depend on your own interpretation. Mine is: No. She was asking the Chinese to continue to invest in the United States so that our fragile economy wouldn’t go further into the toilet as well as recognizing our mutual dependency on each other (but mostly our dependency on them because they’re the ones loaning all the money).
According to Bloomberg:
U.S. Secretary of State Hillary Clinton urged China to continue buying Treasury bonds to help finance President Barack Obama’s stimulus plan.
The two nations’ economies are intertwined and it wouldn’t be in China’s interest if the U.S. were unable to sell its government debt, Clinton said in an interview with Shanghai’s Dragon Television today. China knows it needs a healthy American economy as its biggest export market, she said, adding that the U.S. must take “drastic measures” to stimulate growth.
“We are truly going to rise or fall together,” Clinton said. “By continuing to support American treasury instruments, the Chinese are recognizing” that interconnection.
“China, the largest holder of U.S. government debt, boosted purchases by 46 percent last year to a record $696.2 billion as the global recession spurred demand for the securities. The Chinese government said last week it plans to keep buying Treasuries, adding that future purchases will depend on the preservation of their value and the safety of the investment.
China already owns us– pretty much. And that happened before Obama took office. We’ve been borrowing from them for years– mostly to fund Operation Iraqi Freedom and the “War on Terror”. This is not the O-man’s doing. Luckily for us, Americans are the top purchasers of Chinese products. Wal-Mart shits out “Made in China” and we scoop it up. If we don’t have money to buy that shit, China doesn’t make any money and BOOM! We’re all fucked.
My professor, who is looking more and more like a Glenn Beck ass licker every day, failed to mention that, of course. Our class consists of a good number of PSE4 kids and do they know any better? No. Of course. They think he knows what the fuck he’s talking about. He lays down these little pieces of GOP talking points and hopes beyond hope that these kids pick it up and it sinks in their brains. And they aren’t going to question him because they don’t know any better.
But he didn’t realize I would be in his class and that I can’t keep my mouth shut. He never thought that there would be that one person in his class that would say:
“Excuse me? Could you cite your source for that? Because the United States has been in debt to China for years and that didn’t start with the Obama administration.”
Of course, this didn’t invite conversation. Suddenly class was over and he’d see us on Thursday. That was probably a good thing as I remembered that we’re in debt, but didn’t remember the details. I’ve since amassed good deal of source material so that I can (hopefully) bash him over the head with it.((I probably won’t. He won’t bring it up in class again– just like the Mexico thing.)) I hope he knows now that not everyone in that class is ignorant and that some of us are vaguely familiar with what’s going on regarding American foreign policy and politics.
Please excuse any and all typos as I’m being me and that’s just the way things roll ’round here.
Popularity: 11% [?]
- Last time was when he declared that Mexico is not part of North America– and stood by that. [↩]
- Clinton has already been to Asia. [↩]
- But only a little bit, because I’m short on time. [↩]
- Post-Secondary Education = High school [↩]
I like geeky stuff, politics, squirrels and monkeys.