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Discussion in 'Politics' started by ciao stupido, Mar 1, 2011.
Found this a Tad interesting
who-owns-the-us: Personal Finance News from Yahoo! Finance
God. People die, they dont really own a damn thing on this planet. They can fool themselves all they want.
Doesnt matter if other countries hold stock in America... goodluck trying to get us to pay it back. We cant even stop spending money we dont have, what makes anyone think we would pay anyone back with money we dont have?
I've never understood these sentiments for two reasons:
1) The US government itself holds more of its own debt than ALL OTHER FOREIGN GOVERNMENTS COMBINED! ($4.6 Trillion vs. $4.4 Trillion, source: Debt to the Penny (Daily History Search Application) ). Most of this is tied up in the Social Security trust fund, but government employee retirement funds are also big holders. When you add in Federal Reserve holdings, and state and municipal government pension funds ($1 Trillion, $500 Billion, and $260 Billion), you end up with basically half the entire debt, and private US investors haven't even been counted yet (Mutual Funds and private pension funds combined make up another $1.2 Trillion).
So, who owns the US debt? The majority is held by other parts of the US government, foreign governments hold at most 1/3rd of the total.
2) When someone becomes that heavily invested in you, they lose control. China holds approximately $1.2 Trillion worth of US government debt. But the entire Chinese government budget in 2010 was $1.3 Trillion! None of this is inflation protected, as inflation-protected securities didn't go on sale until this past fall and less than $100 Billion exist in that category.
Worse for China, many of the bonds purchased since 2008 have very low interest rates, so if the US decided to inflate its way out of debt (not even quickly, but at a modest, and sustainable, pace of 3% per year), the US can essentially get out of paying the debt back at all.
Sure, payments will be made, but they'll be less than what the present value of the investments were at the time they were made: China will have lost money.
So if the US has the power to make China lose money on an investment the size of its entire government budget in 2010, who really owns whom?
These are insurance policies for the US Government.
The rest of the world is basically invested in the prosperity of the American economy.
Those sneaky fucks... don't worry though, I am sure Obama still wants to eat your babies.