Essay On China Buying US Debt

China has become a perceived threat to the U.S. economy because of the increasing trade deficit between the two countries, their ability to undercut production costs of similar products produced in the United States, and the amount of leverage that China has over the United States due to amount of money that has been lent by China. Although the United States has taken steps to close the trade deficit, such as convincing China to raise prices on their exports, there is still a considerable gap (Prasad). The United States government continues to print money that they simply can’t afford, therefore, relying even more heavily on China sustaining the value of their currency. Unless the United States is able to close the trade deficit and regain control of our economic flexibility, the problems caused by foreign countries owning our debt will remain eminent.

In conclusion, I think that China should change its policy because it is damaging not only the U.S. economy but the economy globally. Countries such as the United States are still recovering from the economic recession we are still leaving in. It is obvious that if China let the Yuan appreciate their exports will decrease and imports will increase making their trade surplus to decrease. If this happens international countries will be grateful because by this happening means that their export will increase and employment will increase. Countries should avoid doing currency manipulation or artificially devaluing their currency because it just hurts the global economy and it promotes other countries to do the same – it hurts everyone.

As of September 2014, the United States debt had reached $17.7 trillion dollars (Fighting for a U.S. federal budget that works for all Americans, 2014). Over the past few years, the U.S. debt has continued to increase and signs point to this continuing into 2015. According to the article I have cited, China and Japan hold the vast majority of the United States debt (Fighting for a

They now exhibit a challenge in terms of debt, deficit and surplus. The national debt and deficit possess distinct definitions. The budget is the amount of money that the government works with within a given fiscal year and allocates to the different programs. The deficit is when expenditures exceed revenue and is added to the debt at the end of the year. In the last ten years we have experienced enormous deficits that may communicate to the international community that the United States might have trouble producing a balanced budget. This is an accumulative effect as the national debt is combined with the debt held by federal securities outside and inside the government and the public. Foreign country debt is included in the national debt as of March 8th tops $16 trillion dollars. Debt owed to foreign countries like China and Japan equates to a little over $1.1 trillion. Yet, despite the United States’ owing large amounts we are still considered financially sound because of our credit rating. According to Thompson from CNN Money, the United States’ credit rating is in jeopardy of being downgraded because of a weak debt ceiling (Thompson, 2013). This may increase the risk level of investing in the United States.

With all this debt, it begs to question. To who and what does the United States owe all this money? According to the “National Priorities Project”, 34 percent of the debt is owned by foreign countries, like China and Japan, 28 percent by federal accounts, and the remaining 38 percent is owned by other investors or local governments. Ever since the United States was founded, it owed money to the foreign investors and it has only continued to pile up.

It is true the nation needed to borrow from China; nevertheless, did the country need to continue to borrow at such high speed? Maybe, but not one can say for sure. For the sake of the argument, let us imagine for a second that US could have borrowed money once, and the come up with ways to capitalized this many and work on paying our debts. Did the US do that? I don’t know. But if US did, the country did not try hard enough. Had the US taken a more symbiotic approach and utilized the money to, not only revitalize our economy, but to lead the country to become once again self-sufficient, the situation right now could be different.

The largest part of this debt is held by foreign investors, or central banks of other countries, which buy Treasury Bonds from the United States for investments. In 2010, the countries that the United States owed money to are: China which was the most ($1.1 Trillion); then Japan ($800 Billion); the Middle East Countries ($173 Billion); Russia ($168 Billion); Brazil ($164 Billion) and the last one is Taiwan ($152 Billion) it is higher now what the United States owes to them though.

If you’re like most citizens, you are probably unaware of how severe the debt crisis is for the United States of America. An eye-opening article titled “America’s Debt Time Bomb” by John F. Ince, points out the two components of the financial crisis in the United States: the national debt and the current account trade deficit. Current estimates of the rising national debt in America are upwards of $19 trillion, and growing by over a billion a day; severely increasing the chances of a major economic crisis. For instance,” to finance domestic deficits, American policy makers have started to engage in dangerous borrowing patterns from overseas lenders” discloses Ince. When America borrows, we give foreigners a claim to the financial assets

With trade, a growing population, and the government not being able to pay for things came hyperinflation, simply a great depression. Although we are a leading economic nation right now, China’s economy is at an incredible pace and can and in many ways already has taken over ours. As Rome did, we often overextend our reach beyond the point of return on investment. We owe China lots of money to begin with from buying things from them, and also borrowing money. From what I understand, if China sells off our treasury yields, it will make our currency not worth as much. When our currency isn't worth as much it causes inflation, which can cause a major downfall.

Whenever the topic of the American Economy is mentioned the first thing that pops in our heads is,”debt”. The debt of the U.S. has been a controversial topic for years now, especially in our politics. The U.S. debt as if now is 18 trillion dollars, but we didn’t always have this debt.

A million dollars may seem like a lot of money; well multiply that by that by 19 million: 19 trillion dollars -- that is how much the United States owes to other countries. The United States’s debt is a problem that just keeps getting worse. It has been rising since 1775, and has now reached almost 19 trillion in 2016 (Friedman). The amount of government spending is far too high in Social Security, Medicare, Medicaid, and Obamacare (Amadeo). The debt has many effects which may eventually cripple our country. The United States currently owes China $1.185 trillion, and Japan $1.224 trillion. Although experts speculate that it won't happen, if either China or Japan were to ask for their money that the US owes them, it would cause a worldwide

The current economic event on the increase in the National government debt has become of interest to the public and the decision makers. This paper looks at the economic event as per Stephen Dinan’s article in The Washington Times dated on June 16, 2015, in regards to the impact of the increasing national debt to the general economic growth in America. The proportion of the United States ' National debt is increasing in comparison to the National GDP. It is evident from the past years that the United States ' Treasury has been borrowing a lot of funds from its citizens and foreign investors to help fund wars promote the economic development of the country, and save the financial systems as well. This paper will explain and demonstrate an in-depth economic analysis of the USA National debt vital to cope up with this worrying trend in the economy.

The United States will suffer an economic catastrophe when China stops purchasing U.S. government bonds because the U.S. government will not be able to pay its bills. According to Morgan Housel of the investment community, “China has indeed been a prolific buyer of U.S. debt over the past decade; in 2000, Mainland China owned less than $60 billion of Treasury debt [and] by 2010, it owned more than $1 trillion, surpassing Japan as America 's largest foreign creditor.” It is hard to imagine that such a world power like the United States needs any assistance from others. For years it has been speculated that without the help of China buying U.S debt, they will be in a huge deal of problems. That is extremely exaggerated being that the U.S. have many other investors but it is important to note that China is a very huge part of our economic success. Without the help of China we can truly look forward to higher interest rates, higher inflation and crowding out private investment. I do agree that the United States needs China in order to maintain a stable economy. With out the help of China’s investments the America’s economy will become weaken by the impending high interest rates, inflation, high unemployment rates, decrease in productivity, a decline in the stock market and a country where its citizens highly rely on their help of the government.

Nowadays it’s easy to buy a gun, anyone andeveryone can go to a gun show and buy a gun without having to have a backgroundcheck. Gun laws should become stricter so that it’s harder for criminals to buy guns, andso innocent people will not be forced to give up their protection.The economy is the key to a country, and I’m concerned about our economy.Many companies and factories that make products for the U.S. are not even in thecountry. A majority of the things that we have are made in these factories or by thecompanies. This is a problem because these companies and factories are providingpeople in other countries with jobs and money, which is helping their economy.Whereas, they could have factories in the U.S. and provide Americans with jobs andmoney, which would help our economy. As of June this year the unemployment rate is4.9%. In July, 255,000 jobs were created by our economy. These new jobs will no doubtimprove the economy, but we need many more before we will have a strong economy.The U.S. is $19.3 trillion dollars in debt with other countries. $17.8 trillion of that amountis from China. In a percentage it is about 103% of the U.S. gross domestic product(Money Morning). If China decided that we needed to pay them back in full, the U.S.would not be able too. However, the government would try to get the money and oneway would be by raising taxes. Many people aren’t concerned with the U.S. debt rightnow, since it isn’t an issue yet. But, they should be because instead of regularly comingout of debt it is just increasing.The election is coming up in November. All of the candidates are promising howthey are going to fix all of the problems that the United States has. However, it’s

Furthermore, the nation will go deeper into debt with the rest of the world as Americans continue to rely on the strong flow of foreign money, particularly from central banks in Asia, to finance the trade gap. China, Japan and other foreign governments are some of the biggest holders of government securities, lending money to cover the substantial federal budget deficit and helping to keep interest rates and home mortgage costs here relatively low. As a result, American consumers are able to spend more and save less.