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  • Get your fiscal house in order: China warns US

    Get your fiscal house in order: China warns US as Asia's expresses concern for $1.3tn of investments

    'Clock is ticking', says Chinese minister, as US fails to break deadlock over government shutdown and fast-approaching ‘debt ceiling’ deadline

    BEN CHU Author Biography ECONOMICS EDITOR TUESDAY 08 OCTOBER 2013



    China, the biggest foreign creditor of the United States, has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay.

    The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking” and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.

    “We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,” Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,” he added.

    The American government entered its seventh day of shutdown on Monday, following the failure of Congress to approve the national budget a week ago. And there was little sign of progress on the still more crucial issue of the fast-approaching “debt ceiling” deadline. Yet rather than indicating a willingness to negotiate, the Republican Speaker of the House of Representatives, John Boehner, stated on Sunday that it was “time for us to stand and fight” over the budget. He added that a default was “the path we’re on”. American stock markets opened down in response to the belligerent comments yesterday, with the S&P 500 Index of leading shares shedding 0.5 per cent.

    In September 2008 China eclipsed Japan to become the biggest single foreign creditor of the US federal government. The US administration estimates that the China government holds at least $1.3 trillion of its bonds. The total could be higher because Beijing is known to hold American debt through intermediaries. And, in total, the Beijing authorities have $3.5trn of dollar-denominated assets, which would also be hit hard in the event of a default.

    Independent
    "Alexa, slaughter the fatted calf."

  • #2
    That's just great. We have the Chinese scoreboarding us.

    Embarrassing.
    "There are four lights!"

    Comment


    • #3
      Or what? They're not going to lend us any more money?

      Methinks they don't even understand what the debt limit is. Seems to be a common malady these days.
      Bask in the warmth of the Deep South
      No one will be denied:
      Big law suits and bathroom toots;
      We're all getting Dixie-fried.
      But somewhere Hank and Lefty
      Are rollin' in their graves
      While kudzu vines grow over signs that read "Jesus Saves."

      Comment


      • #4
        Explain it, then.
        "There are four lights!"

        Comment


        • #5
          It's the amount that the US government is legally allowed to borrow. It's a self-imposed limit. In no way does a failure to raise the debt limit somehow mean that there will be a "default." That's like saying that if you don't take out another credit card, you won't pay your mortgage this month.
          Bask in the warmth of the Deep South
          No one will be denied:
          Big law suits and bathroom toots;
          We're all getting Dixie-fried.
          But somewhere Hank and Lefty
          Are rollin' in their graves
          While kudzu vines grow over signs that read "Jesus Saves."

          Comment


          • #6
            Originally posted by Adam View Post
            It's the amount that the US government is legally allowed to borrow. It's a self-imposed limit.
            Okay, I'm with you.

            In no way does a failure to raise the debt limit somehow mean that there will be a "default."
            How will items be paid if there are more obligations than money to pay them? Is this merely a semantic argument over the word "default"? If so, you can call it green peas for all I care.

            That's like saying that if you don't take out another credit card, you won't pay your mortgage this month.
            It appears to be like you have more obligations than revenue and either you get credit to cover it or you green peas on some of them.
            Last edited by Billy Jingo; Tuesday, October 8, 2013, 10:02 AM.
            "There are four lights!"

            Comment


            • #7
              I guess one of the things you do is start reviewing your obligations and prioritizing where the money gets spent.
              If I want to stay in my house, I will make the payments on that. I may have past obligations for cable, cell phone, yard maintenance, but I can discontinue those as well as not dining out 10 times a month, forgoing the golf outings and other hobbies and not buying a new pair of tennies if I already have a dozen or so.

              If the government wanted to (emphasis on wanted), I am sure they could find a few billion here and there that they don't need to spend. Of course that is like telling a homeless wino he really doesn't need that bottle of Thunderbird and the results are remarkably similar.
              We are so fucked.

              Comment


              • #8
                Originally posted by gary m View Post
                If the government wanted to (emphasis on wanted), I am sure they could find a few billion here and there that they don't need to spend.
                No doubt. When the Senate and House budgets go to conference, perhaps they could find them.
                "There are four lights!"

                Comment


                • #9
                  Originally posted by Billy Jingo View Post
                  How will items be paid if there are more obligations than money to pay them?
                  There's a shitload of money. We take in a HUGE amount of revenue every month at the Treasury, many times more than enough to service the debt that is outstanding

                  Originally posted by Billy Jingo View Post
                  Is this merely a semantic argument over the word "default"? If so, you can call it green peas for all I care.
                  No, it's pointing out that "default" is not even remotely what happens when we hit the debt ceiling. What happens is we stop borrowing money. That means that Congress can't go about buying more votes with tax dollars because they won't be able to borrow any more. It does not mean that the dollar crashes or US bonds become worthless or any of the other Weimar Republic predictions that the Left keeps pushing.

                  Just like all of the doomsaying about the "government shut-down" that didn't come true, just like all of the doomsaying about the "sequester" that never came true, just like all of the doomsaying about the so-called "Bush tax cuts for the rich" that were handily and very demonstratively proven quite false, just like all of the doomsaying about how old women and babies would be starving in the gutter that never came true after welfare reform was shoved down Clinton's throat, this is just more bullshit scare-mongering by the Democrats and, most particularly, Leftist extremist activists. No more, no less. There is no dire consequence for limiting ourselves on how much money we borrow, no more so than you choosing to forego putting that 72" plasma screen on your credit card and deciding to listen to the Rangers on the radio in your garage.
                  Bask in the warmth of the Deep South
                  No one will be denied:
                  Big law suits and bathroom toots;
                  We're all getting Dixie-fried.
                  But somewhere Hank and Lefty
                  Are rollin' in their graves
                  While kudzu vines grow over signs that read "Jesus Saves."

                  Comment


                  • #10
                    Originally posted by Adam View Post
                    There's a shitload of money. We take in a HUGE amount of revenue every month at the Treasury, many times more than enough to service the debt that is outstanding
                    So you are talking about one obligation: interest on the debt. If that is your only concern, then yes, we can probably cover that.
                    "There are four lights!"

                    Comment


                    • #11
                      Originally posted by Billy Jingo View Post
                      So you are talking about one obligation: interest on the debt. If that is your only concern, then yes, we can probably cover that.
                      We can cover that plus a whole lot more. There's plenty of revenue coming in to fund Social Security from the revolving line of credit that is the "lockbox," there's plenty of revenue to pay federal workers (even their back pay), to pay the military, even to pay Congressional salaries and keep the lights on at the big dome. What we won't be able to do is shell out more good money after bad on bullshit black holes of money like Solyndra. Congress is going to have to back-track on some of their promises and be the politically-incorrect "Indian-giver." They're going to have to tell Sandra Slut that she's just going to have to pay for her own Goddamn rubbers after all. They're going to have to tell all those millions of new food stamp recipients that no, sorry, but they don't actually need food stamps, and we're going to roll the program back to 2008 levels of spending. They're going to have to decide that the Marines don't really need the Osprey after all, and therefore they're not going to be giving Boeing or whoever it is $35B to develop a plane that isn't going to work. Less toys, more work.
                      Bask in the warmth of the Deep South
                      No one will be denied:
                      Big law suits and bathroom toots;
                      We're all getting Dixie-fried.
                      But somewhere Hank and Lefty
                      Are rollin' in their graves
                      While kudzu vines grow over signs that read "Jesus Saves."

                      Comment


                      • #12
                        It's a sad day when the Communist country tells the capitalist country to get back to work.

                        - - - - - - - - - -

                        Originally posted by gary m View Post
                        I guess one of the things you do is start reviewing your obligations and prioritizing where the money gets spent.
                        If I want to stay in my house, I will make the payments on that. I may have past obligations for cable, cell phone, yard maintenance, but I can discontinue those as well as not dining out 10 times a month, forgoing the golf outings and other hobbies and not buying a new pair of tennies if I already have a dozen or so.

                        If the government wanted to (emphasis on wanted), I am sure they could find a few billion here and there that they don't need to spend. Of course that is like telling a homeless wino he really doesn't need that bottle of Thunderbird and the results are remarkably similar.
                        Yeah. I hate to say it, but cut out those federal parks and museums.

                        Comment


                        • #13
                          Okay, whatever.

                          Half the rightwing blogosphere douchebaggery is shitting their pants over the WWII memorial being closed and you think cutting off Medicare is going to be just gumdrops and daffodils?
                          "There are four lights!"

                          Comment


                          • #14
                            Originally posted by Billy Jingo View Post
                            Okay, whatever.

                            Half the rightwing blogosphere douchebaggery is shitting their pants over the WWII memorial being closed and you think cutting off Medicare is going to be just gumdrops and daffodils?
                            Who said anything about cutting off Medicare?
                            Bask in the warmth of the Deep South
                            No one will be denied:
                            Big law suits and bathroom toots;
                            We're all getting Dixie-fried.
                            But somewhere Hank and Lefty
                            Are rollin' in their graves
                            While kudzu vines grow over signs that read "Jesus Saves."

                            Comment


                            • #15
                              Originally posted by Adam View Post
                              Who said anything about cutting off Medicare?
                              I know you guys are kinda hard core misogynist weird about the whole Sandra Fluke thing but I don't think she is going through 600 billion in condoms.
                              "There are four lights!"

                              Comment

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