CHINA MYTH #3 [+] serious ballot by patch22us ACTIVE Wed Aug 08, 07 - Mon Aug 13, 07 Myth: China has not debt. Fact: China has over $1 Trillion dollars in external and internal public debt, much of it, according to BusinessWeek, is bad loans that have to be repaid by China internally and to external entities, including the United States. Much is made about the U.S. debt, but more often than not, you don't see the mainstream media actually explaining it in the detail it needs. For example: "Washington, DC - Senator Hillary Rodham Clinton today called for action to address the growing vulnerability to the US economy from our increasing foreign-held debt citing that foreign nations now hold nearly half or more than $2.2 trillion of all public debt with China and Japan holding nearly $1 trillion." Another example: "By comparison, the US national debt stood at $8.4 trillion as of April 13, 2006, or 65% of forecast GDP. About $4.9 trillion of the US national debt is held by the public and $3.5 trillion is held intra-governmentally." So out of that $8.4 Trillion, about $2.2 Trillion is held by foreign governments, mostly Japana and China. Each have about half. So in reality, China only has about $500 billion in true U.S external debt. And, the total external debt is in reality, less than 20% of total GDP. Listening to sources like CNN, you'd think we owed China trillions upon trillions of dollars. Here is what they leave out: The U.S. government lists debts as including Social Security and Medicare payments 50 years from now. So in ohter words, they look at it like "well, even though the money is not due to those programs all at once, fiscally, we project it out over the course of the next 50 years." Why? Example: "The United States public debt, commonly called the national debt, gross federal debt or U.S. government debt, is the amount of money owed by the United States federal government to creditors who hold U.S. Debt Instruments. As of the end of 2006, the total U.S. federal public debt was $4.9 trillion. This does not include the money owed by states, corporations, or individuals, nor does it include the money owed to Social Security beneficiaries in the future. If intragovernment debt obligations are included, the debt figure rises to $8.7 trillion. If unfunded future obligations are added (i.e. Medicare and Social Security) this figure rises dramatically to a total of $59.1 Trillion . " So in reality, the U.S. debt is primarily owed to ourselves. Some say, if we did away with Social Security and Medicare, it pretty much goes away. Once again, I'm not making a statement of my views on it or minimizing it, but the alarmist, ratings-grabbing mainstream media fails time and again to tell the true and accurate picture. China's economy in reality is less than half or ours, so their debt ratio is actually equal to ours. The main difference is that China holds huge sums of hard U.S. currency. That does not mean we owe them money as it were, it simply means that they have accumulated vast sums of U.S. dollars because they are paid in those dollars. Sometimes they need to spend them, so they buy U.S. Treasuries, which equates to the $500 or so billion we owe them. By doing so, it means the U.S Treaury has a re-influx of cash, and therefore, does not have to print money, which keeps inflation in check. But it is not borrowed money...it is simply "buy a Treasury note now at $50.00 and in 25 years, well pay you $75.00. Every single nation on earth does that and is often how they finance their infastructure (e.g. building a bridge). They tend to keep it inernal, where as the United States has foreign countries buying those "bonds" (which is the $2.2 trillion) I agree that it is, to a degree, overblown I am still very worried SORRY, THIS POLL IS NOW CLOSED. Ballot #116826 : Voting Finished : SEE RESULTS Comment: Register to submit comments You may still vote without registration show your vote with comment?

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