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> I am sure if I had a billion people working for me who I could steal from > (their productivity wise) I could assume a bunch of the US debt as well.
> I just have an image of some poor Chinese kid, up to his thighs in rice paddy, > runny nosed on a cold morning, thinking how wonderful his government is > because they can afford to buy the debt of the US
I heard this idea of "China buying US debt" being tossed around during the election. Barack Obama used it a lot more that John McCain.
There is a general lack of understanding about how China came to hold billions of dollars of "US Debt".
Back in the 1960s China was a nation in a state of collapse. Having come out of a bad revolution and a "cultural revolution" China found itself with almost no industry, no agricultural production and a lack of a good educational system and technology. Western economicsts knew that China did have one asset which was worth a lot. This was its people. With a high population China was sure to come out of its problems if China could channel all those people into industrial production.
Richard Nixon made that historic trip to China and later Deng Xiaoping (the communist leader educated in France) agreed to allow foreign investment in China. After the fall of the Berlin wall, western companies rushed to open factories in China because with an average salary of 800 USD per year China offered one of the lowest labour costs in the world.
Western companies have made trillions of dollars manufacturing goods in China. Rather than calling this "we are exporting jobs overseas" or "we are exploiting Chinese people", western economists invented a sanitized term: "Outsourcing".
The US has "outsourced" so much of its production to China that now the capital flow to China exceeds anything that they could afford to buy from the US by approximately 45 to 50 billion USD per month. American politicians cry fould saying that China has protectionist policies in place but the reality is that China does not need much along the lines of manufactured goods. China buys billions of dollars of grain and legumes from the US, but agricultural products are valued relatively low. American manufactured goods have become in essence luxury goods. The average Salary of Chinese workers does not allow them to buy cars or computers, so the balance of trade is out of whack.
Since the US debt is now growing at 40-50 billion per month in trade and capital exchange, the Chinese are not stupid and they are heavily hedging their holding of Us dollars by purchasing massive amounts of treasury bills and federal reserve bonds.
American politicians point the finger at China and the Chinese government, but the reality is that the debt is being fuelled by our consumption and the greed of large monopolies that have shifted all of the manufacturing to places like China, India and Vietnam. They do it because people in those countries are poor and when you are poor it is easy to be exploited.
Should the Chinese government raise their minimum salary? That would cause massive inflation in the US because the manufacturing cost would go up, and companies like Walmart oppose anything like that. Should the Chinese government take measures against foreign companies that exploit Chinese workers? The American government has already taken China to arbitration to the WTO when they tried to impose restrictions on foreign companies. Walmart fought tooth and nail to stop the Chinese government from passing a law requiring that Walmart employees in China join local unions.
Pointing the finger at China is unfair, because our side is as much to blame as theirs. I will believe in pointing the finger on the day when the American government (and other western governments) requires American companies to honor minimum salaries on a worldwide scale. On that day unfair labour advantage will end and American companies will pack up their bags and bring manufacturing back to the US, and the US will stop "selling its debt" to countries like China, India or Korea.
(kaŝi) Ĉu vi emas je ludo garantie finiĝonta post 2 horoj? Kreu novan ludon laŭ via prefero, elektu 'Tempo por ludo' kaj metu 'Tempo' al '0 tagoj, 1 horo', Bonifikacio al '0 tagoj, 0 horoj' kaj Tempolimo al '0 tagoj, 1 horo'. (TeamBundy) (Montri ĉiujn konsilojn)