Comments on: What the U.S. owes China http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/ Have you driven a Ford lately? Fri, 21 Nov 2008 09:43:10 +0000 http://wordpress.org/?v=2.5.1 By: jerome drossart http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-2037 jerome drossart Fri, 14 Nov 2008 15:21:36 +0000 http://www.whyweworry.com/blog/?p=20#comment-2037 sam walker, I believe the marshall plan was a gift from the US to europe to help it get back on its feet. it was mostly food and fuel, and was never meant to be paid back. it's purpose was also political and economical: to keep communism at bay and for europeans to eventually use american products and services. the marshall plan money(about $90billion today) was between 5 to 10% of the capital needed to rebuild europe. after that, america loaned massive amounts of money(at a reasonable rate)which did the actual rebuilding of europe. those loans were repaid. the UK had a 60-year loan and made its last payment to the federal reserve in december of 2006. so, no, the europeans did not simply "blow off" its obligations to the US. sam walker,

I believe the marshall plan was a gift from the US to europe to help it get back on its feet. it was mostly food and fuel, and was never meant to be paid back. it’s purpose was also political and economical: to keep communism at bay and for europeans to eventually use american products and services. the marshall plan money(about $90billion today) was between 5 to 10% of the capital needed to rebuild europe.
after that, america loaned massive amounts of money(at a reasonable rate)which did the actual rebuilding of europe.
those loans were repaid. the UK had a 60-year loan and made its last payment to the federal reserve in december of 2006. so, no, the europeans did not simply “blow off” its obligations to the US.

]]> By: sleeping disorders http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-2032 sleeping disorders Thu, 13 Nov 2008 20:04:07 +0000 http://www.whyweworry.com/blog/?p=20#comment-2032 gas prices are down, finally! i guess all of the big wigs cashed out. gas prices are down, finally! i guess all of the big wigs cashed out.

]]> By: Chris http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-2028 Chris Thu, 13 Nov 2008 03:04:58 +0000 http://www.whyweworry.com/blog/?p=20#comment-2028 Well... right now you are a little off. Because economies around the word are tumbling, we are starting to look like the best of the worst. That's why the dollar has been rising and foreign investors are treating us as a safe place to park their money. Well… right now you are a little off. Because economies around the word are tumbling, we are starting to look like the best of the worst. That’s why the dollar has been rising and foreign investors are treating us as a safe place to park their money.

]]> By: Ian http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-2017 Ian Wed, 12 Nov 2008 18:46:03 +0000 http://www.whyweworry.com/blog/?p=20#comment-2017 This is how I understand it, which might be a little off. Foreign investors buy the dollar when they perceive that the US economy is strong. This allows us to deficit spend and still maintain healthy economic growth. When our economy appears weak as it does now, investors stay away from the dollar because it no longer looks like a safe investment. Thus the value of the dollar drops. This causes countries to be less willing to lend us money which makes us less able to deficit spend and still maintain growth. The US goes through recessions like every 100 months and they last something like 10 months on average. We will recover from this mess and be OK, but damage has been done to the American "brand" which might make it difficult for us to remain the top dog economically. People might be more hesitant to lend us money. Countries may no longer see us as the ideal economic model. There is no guarantee that China's economic system will work over the long term. They do have an excess of financial regulation but not enough regulation of their products which has certainly been hurting the worldwide view of their food and toy exports recently. This is how I understand it, which might be a little off. Foreign investors buy the dollar when they perceive that the US economy is strong. This allows us to deficit spend and still maintain healthy economic growth. When our economy appears weak as it does now, investors stay away from the dollar because it no longer looks like a safe investment. Thus the value of the dollar drops. This causes countries to be less willing to lend us money which makes us less able to deficit spend and still maintain growth. The US goes through recessions like every 100 months and they last something like 10 months on average. We will recover from this mess and be OK, but damage has been done to the American “brand” which might make it difficult for us to remain the top dog economically. People might be more hesitant to lend us money. Countries may no longer see us as the ideal economic model. There is no guarantee that China’s economic system will work over the long term. They do have an excess of financial regulation but not enough regulation of their products which has certainly been hurting the worldwide view of their food and toy exports recently.

]]> By: Chris http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-2009 Chris Tue, 11 Nov 2008 22:59:53 +0000 http://www.whyweworry.com/blog/?p=20#comment-2009 We could very well remain the world economic leader. But that doesn't mean we should recklessly borrow ourselves into oblivion. <a href="http://www.whyweworry.com/blog/2008/10/09/why-we-might-need-more-deficit-spending/" rel="nofollow">I've made the case for more deficit spending</a> during this time of economic turmoil, but once we crawl out of the recession we need to find ways to fix the imbalance between borrowing wealth and creating it. We could very well remain the world economic leader. But that doesn’t mean we should recklessly borrow ourselves into oblivion.

I’ve made the case for more deficit spending during this time of economic turmoil, but once we crawl out of the recession we need to find ways to fix the imbalance between borrowing wealth and creating it.

]]> By: Munish http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-2008 Munish Tue, 11 Nov 2008 20:50:11 +0000 http://www.whyweworry.com/blog/?p=20#comment-2008 I personally feel that International economics is much more complex then what meets the eye. I remember reading somewhere that Japanese banks have lended a total loan amount which is two times their original asset values. Such banks survived the financial crisis, infact they are buying US banks and on the other hand (far too ancient) US banks are falling prey to financial crisis. The actual worth of assets depend on the share prices of the company. Share prices are very fragile. And world over share prices mostly or partly depends on US economy. Other countries can become partially independent, but no economy can claim to be totally independent. So until there is interdependency of economies, US economy will play the part of regulatory body. Chinese lack such edge and open mindedness. Besides they are widely hated as new nexus of Evil. That makes me believe that US would remain the most stable and world leader economy for many years to come. I personally feel that International economics is much more complex then what meets the eye. I remember reading somewhere that Japanese banks have lended a total loan amount which is two times their original asset values. Such banks survived the financial crisis, infact they are buying US banks and on the other hand (far too ancient) US banks are falling prey to financial crisis. The actual worth of assets depend on the share prices of the company. Share prices are very fragile. And world over share prices mostly or partly depends on US economy.

Other countries can become partially independent, but no economy can claim to be totally independent. So until there is interdependency of economies, US economy will play the part of regulatory body. Chinese lack such edge and open mindedness. Besides they are widely hated as new nexus of Evil. That makes me believe that US would remain the most stable and world leader economy for many years to come.

]]> By: Chris http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-1992 Chris Mon, 10 Nov 2008 13:57:44 +0000 http://www.whyweworry.com/blog/?p=20#comment-1992 Munish, Of course the USA has the option not to pay the money back. But if we don't then people around the world and at home lose faith in government issued bonds and other forms of securities. The dollar will tumble in value, and our consumer nation won't have the buying power to continue importing goods from around the world. Certainly that will hurt producer nations like China, but they're working toward the day when they aren't dependent on us, meanwhile we're becoming more dependent on them. Munish,
Of course the USA has the option not to pay the money back. But if we don’t then people around the world and at home lose faith in government issued bonds and other forms of securities. The dollar will tumble in value, and our consumer nation won’t have the buying power to continue importing goods from around the world.

Certainly that will hurt producer nations like China, but they’re working toward the day when they aren’t dependent on us, meanwhile we’re becoming more dependent on them.

]]> By: Ronny http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-1987 Ronny Sun, 09 Nov 2008 09:10:42 +0000 http://www.whyweworry.com/blog/?p=20#comment-1987 Then you probably won't need to worry about the credit card debt... The bank need to worry about lending you their money. But in most cases, it ain't so... Debt need to be repaid, or there will be consequenses. Like it or not. Then you probably won’t need to worry about the credit card debt… The bank need to worry about lending you their money.

But in most cases, it ain’t so… Debt need to be repaid, or there will be consequenses. Like it or not.

]]> By: Munish http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-1980 Munish Fri, 07 Nov 2008 22:31:53 +0000 http://www.whyweworry.com/blog/?p=20#comment-1980 We in India have a saying "Making palm tree out of sesame seed". That's exactly what Chris's doing here. Writing Fanatical articles to keep people worried. If US owe some money to china, then its (poor)Chinese people who need to worry about their $4000. In international scenario you can't force even "Banana Republic" to pay the debts, let alone the almighty USA. Like another Indian Saying "Bogged merchant keeps giving credit". So let (rich)Americans enjoy this debt because they will pay only by terms and time suitable to them. PS. I suggest you change the name of this blog from "why we worry" to "how to worry". We in India have a saying “Making palm tree out of sesame seed”. That’s exactly what Chris’s doing here. Writing Fanatical articles to keep people worried. If US owe some money to china, then its (poor)Chinese people who need to worry about their $4000. In international scenario you can’t force even “Banana Republic” to pay the debts, let alone the almighty USA. Like another Indian Saying “Bogged merchant keeps giving credit”. So let (rich)Americans enjoy this debt because they will pay only by terms and time suitable to them.

PS. I suggest you change the name of this blog from “why we worry” to “how to worry”.

]]> By: Sam Walker http://www.whyweworry.com/blog/2008/01/17/what-the-us-owes-china/#comment-1853 Sam Walker Wed, 15 Oct 2008 16:02:06 +0000 http://www.whyweworry.com/blog/?p=20#comment-1853 I hate to be the one that tosses a t--d in the punch bowl, but what about all the WWII debts European countries owed the U.S. They simply blew that off. Winston Churchill inferred that it's a debt that will never be paid. I get so tired of seeing "made in China" on almost everything I pickup in a store. Too many of the small gadgets don't work properly...ask Walmark, Target or any of the other retailers. Every chance I get, I purchase American made products. Forget about the "labor cost" argument. Most items made in America are done by automation and machinery. Why should it surprise us that these third world countries claim the U.S. owes them a ton of money? What we need is congressmen with balls! I hate to be the one that tosses a t–d in the punch bowl, but what about all the WWII debts European countries owed the U.S. They simply blew that off. Winston Churchill inferred that it’s a debt that will never be paid. I get so tired of seeing “made in China” on almost everything I pickup in a store. Too many of the small gadgets don’t work properly…ask Walmark, Target or any of the other retailers. Every chance I get, I purchase American made products. Forget about the “labor cost” argument. Most items made in America are done by automation and machinery. Why should it surprise us that these third world countries claim the U.S. owes them a ton of money? What we need is congressmen with balls!

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