Sunday, November 22, 2009

China and the US Debt

Dougas Holtz-Eakin in the WSJ on The Coming Deficit Disaster: "And how will the resulting higher interest rates, diminished dollar, higher inflation, and economic distress manifest itself?" I've said before that China is not buying our debt, rather, China is purchasing future foreign policy concessions. They will eventually offer us debt forgiveness. And we will recognize they're sovereign claims to Taiwan and Tibet... maybe even give them a carrier battle group or three.


Margaret said...

I've thought from the start that this is really about keeping America from defending its allies, Taiwan, Japan, and South Korea.

dsm said...


I think there's a pretty compelling argument that "engagement" or whatever you want to call it with China was/is a way to avoid conflict with them. If we're business partners, then it doesn't make sense for things to ever "go hot". Of course, if we're a deadbeat debtor, then that changes.