My next question is pertaining to China. China has a lot of cash. They purchase most of US bonds with them and I guess they choose not to reinvest it in their own economy as much?? or do they?
Next question what does the US then do with "their" cash. Well, it is really China's but , why does the US not have its own cash , or does it?
What does it spend its cash on?
2007-02-05 13:58:18 · 4 answers · asked by ? 1 in Social Science ➔ Economics
The US uses it to buy warplanes and tanks for invading other people's countries, pensions and medicare for elderly Americans, food stamps for the poor, repair chits for the mayor of New Orleans to build his city up after Katrina, and all the other things that the US govt spends money on, more money than it raises in taxes ~ hence the budget deficit. The Treasury issues bonds and Treasury Bills to cover the budget deficit.
The Chinese invest a great deal in their own economy, they have to to keep up their 8-10% a year GDP growth rate.
2007-02-06 05:57:27 · answer #1 · answered by MBK 7 · 0⤊ 2⤋
China holds US Dollars as a reserve currency, effectively using the dollar to (partially) support their own currency the same way the US used the gold standard until the 1960s.
2007-02-09 02:15:50 · answer #2 · answered by Matthew 2 · 1⤊ 0⤋
I think, that money is the route to all evil, but then you cant live with it. And you cant live with out it. O heck. only God knows!.
2007-02-05 22:27:41 · answer #3 · answered by Anonymous · 1⤊ 0⤋
God or Gold whatever you intended to say, - YES.
2007-02-09 13:42:03 · answer #4 · answered by Whistler R 5 · 0⤊ 0⤋