Will the mighty US military machine crumble if China stops lending the US government money?

Question

China lends the US Government money in exchange of US Treasury Bills.

Answer 1

Very astute, I am impressed! The Republicans and Right wingers who are always clamoring for lower taxes'; bitching that the income tax is illegal; urging the Senate to drop Social Security, etc should wonder who is paying the bills. You Sir, are the winner; China is the single biggest holder of US debt and could end the war tomorrow and bring us to the brink of destruction all by calling in the markers. That is why I laugh my *** off when I hear Rush and Hannity running their ignorant pie holes and urging the uneducated to vote their way while they sell America to China. Again I am impressed!!

God Bless You and Our Southern People.

Answer 2

No, that's crazy talk. First you should know that China's purchases of US treasuries represents only a small fraction treasury bond sales (about 10%). In comparison to total US federal funding, that's a REALLY tiny piece of the total -- about 1.5%. The United Kingdom buys FAR more treasury bonds than China. So no, we do not depend on Chinese lending to a meaningful degree. The very worst case scenario if all Chinese entities quit buying US bonds is a bit less demand at treasury auctions, resulting in slightly higher interest rates to induce enough demand to pick up the slack. Even that is no guarantee, as a million other things also affect interest rates. Rather than expect China to quit buying our bonds, its much more likely that their need to invest the hard currency they receive from trade surpluses will grow while our deficit continues to rapidly shrink (you DID know it is shrinking?), to the point where their need to invest totally swamps the supply of Treasuries available to them. They need us worse than we need them. You should also know where they get the US dollars to buy Treasury bonds. They get them from their trade surpluses with us (ie, our trade deficit). So the US dollars we send to China for imports bounce right back to us to help fund our government so we can pay less taxes. It's a shame people don't understand what a sweet deal that is for us, we're practically scamming China.

Answer 3

We are the last surviveing superpower, that should mean something...

Of course it wont crumble! what people fail to see is that They depend on us! the US citizens are customers of the world! we buy more garbage from countries than we export, only because its "cheaper" than american made products... but believe me if we bought all american products the world would look alot alot different. And heck what if we started chargeing for the help we provide to other countries? Ha, the governtment would have so much more money, we could afford to blow it!

Read the article not just the headline dork

Answer 4

You better hope not!! You need to brush up on how the world economy system works before you start to get critical but don't be surprised if it all changes before you're done. It's the way of things always has been and always will be.

Answer 5

What will happen to China if we stop investing in their businesses? That is a much more astute question.

Answer 6

If it 'crumbled', so would our economy. And if that happened, what do you think would happen to china when we can't afford to buy that cheap stuff from them.

Answer 7

You have factual proof to back that..

Can you show a webpage, or whitehouse report stating that to be the truth?

Answer 8

It's a two way street. Did you just read a headline or something?

Answer 9

And we trade with them with a huge trade deficit, we send them all of our scrap metal and buy the stupid little toys they make out of it so what? They need us more then we need them. You are un-American for even thinking such a thing

Answer 10

So, and if we stop buying cheap chinese crap, will they have to sell those bonds to cover their butts.