China tells US to tighten its belt, deal with debt 'addiction'

China tells US to tighten its belt, deal with debt 'addiction'

Associated Press
August 6, 2011

BEIJING - China, the largest foreign holder of U.S. debt, demanded Saturday that America tighten its belt and confront its "addiction to debts" in the wake of Standard & Poor's decision to downgrade the U.S. credit rating.

China currently owns $1.2 trillion of U.S. Treasury debt, the largest stake of any central bank. The commentary carried by the state-run Xinhua News Agency was Beijing's first official response to the S&P decision.

"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," Xinhua said.

It said the rating cut would be followed by more "devastating credit rating cuts" and global financial turbulence if the U.S. fails to learn to "live within its means."

"China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets," it said.

Xinhua said the U.S. must slash its "gigantic military expenditure and bloated social welfare costs" and accept international supervision over U.S. dollar issues.

Last month, China's top general, Chen Bingde, also linked America's financial woes to its military budget and asked whether paring back on defense spending wouldn't be the best thing for U.S. taxpayers.

Such comments reflect Beijing's desire that Washington reduce its military presence in Asia. The U.S., rattled by China's military buildup, also routinely chides Beijing for its fast-growing defense spending.

Xinhua also suggested a new global reserve currency might be necessary to replace the dollar, a position China has frequently advocated.

"Mounting debts and ridiculous political wrestling in Washington have damaged America's image abroad," Xinhua said. "To cure its addiction to debts, the United States has to re-establish the common sense principle that one should live within its means."

Jitters over the U.S. handling of its debt problems were also being felt elsewhere in Asia, said Kishore Mahbubani, Singapore's former ambassador to the United Nations.

The dean of Singapore's Lee Kuan Yew School for Public Policy said the last-minute agreement by the U.S. Congress to lift the debt limit and avoid default has policymakers in Asia questioning the stability of U.S. global leadership.

"It's definitely undermined U.S. credibility," Mahbubani said late Friday. "Everyone is wondering if you have such a dysfunctional political process, how can you provide global leadership. It's very dangerous for the world."

Sad isn't it? Communist China is giving economic advice to the most powerful republic in the world's history.

This is a sad commentary on just how far this nation has fallen from its constitutional roots.

The founders and framers are rolling over in their graves.

Alas, the truth of Jefferson's words (see my siggy) could not be more appropriate at this moment.

Yeah, when I read this story, I thought "This is a new low."

dblboggie wrote:Sad isn't it? Communist China is giving economic advice to the most powerful republic in the world's history.

This is a sad commentary on just how far this nation has fallen from its constitutional roots.

The founders and framers are rolling over in their graves.

Alas, the truth of Jefferson's words (see my siggy) could not be more appropriate at this moment.

Your constitutional roots have nothing to do with the actions China is advising you to take.

Indeed. The fact that China is lecturing us is evidence of nothing but China's political opportunism.

Ahhh.... but you are wrong grasshoppers! Today's woes have quite a bit to do with our constitutional roots.

Had the federal government simply operated within the confines of its constitutionally mandated and enumerated powers and not sought to take on ever greater powers over our private sector economy, and not sought to pick winners and losers in that economy via crony capitalism, we wouldn't be in this mess and we would certainly not be being lectured by Communist China on how to deal with our spending and debt!

Every problem we currently have is a direct or indirect result of the federal government slipping the moorings of constitutional republicanism and free market capitalism.

kronos wrote:Indeed. The fact that China is lecturing us is evidence of nothing but China's political opportunism.

I thought it had more to do with the fear which America's down grading had around the world.. at one time America and the US dollar was the back bone of the world.. [every one who brought oil had to do so using the US dollar, making it and America the back bone of the world] it will not take much more of a slip to the value of the dollar to drag the world and china into a 1930's type recession.

I don't think many here understand the fear coming from the latest silly game between the blind tea-party's pointless attack and Obama's failed attempt to deal with the day-to-day cost of running their country.. the world's money men ran away from the dollar and American shares leaving a hole through which America has slipped.. a slide down from it's AAA rating.. a slide it is feared will continue, as I say dragging down the rest of the world.. the Question is will the tea-party stop playing it's petty politicking before it sinks us all.

cable2+1 wrote:the Question is will the tea-party stop playing it's petty politicking before it sinks us all.

As if the Democrats are being on the level plane here.

TexasBlue wrote:

cable2+1 wrote:the Question is will the tea-party stop playing it's petty politicking before it sinks us all.

As if the Democrats are being on the level plane here.

do you not see the effect of the petty politicking is having on the world.. do you not see the relationship between the game played out by both tea-party and Obama and the down grading of America and wall st crash.

cable2+1 wrote:

TexasBlue wrote:

cable2+1 wrote:the Question is will the tea-party stop playing it's petty politicking before it sinks us all.

As if the Democrats are being on the level plane here.

do you not see the effect of the petty politicking is having on the world.. do you not see the relationship between the game played out by both tea-party and Obama and the down grading of America and wall st crash.

After all the grandstanding by Democrats when they held control of our congress for 4 years? C'mon. It's as if they can and do no wrong to many. Nobody bothers to criticize them as long as they believe as they do. Our problem here isn't of a Tea Party making. It's been in the making for years and years.

cable2+1 wrote:the Question is will the tea-party stop playing it's petty politicking before it sinks us all.

TexasBlue wrote:As if the Democrats are being on the level plane here.

cable2+1 wrote: do you not see the effect of the petty politicking is having on the world.. do you not see the relationship between the game played out by both tea-party and Obama and the down grading of America and wall st crash.

TexasBlue wrote: After all the grandstanding by Democrats when they held control of our congress for 4 years? C'mon. It's as if they can and do no wrong to many. Nobody bothers to criticize them as long as they believe as they do. Our problem here isn't of a Tea Party making. It's been in the making for years and years.

the money men did not react to what had taken years to create but to what happen on the day..