Friday, March 13, 2009

The common thread from Red China's leader to Warren Buffett

Everybody's concerned about America's new heights (depths?) of debt. NYT: "China's leader says he's worried over U.S. treasuries"

The Chinese prime minister, Wen Jiabao, spoke in unusually blunt terms on Friday about the “safety” of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to offer assurances that the securities would maintain their value.

Speaking ahead of a meeting of finance ministers and bankers this weekend near London to lay the groundwork for next month’s Group of 20 summit meeting of the nations with the 20 largest economies, Mr. Wen said that he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.
Sounds like somebody's been hanging out with former Commerce secretary-designate, New Hampshire Senator Judd Gregg:

In his opening statement, Gregg politely called the administration’s budget forecast a lie.

"The argument that it cuts the debt in half in four years is, ahh, is truly spurious," he told Geithner.

"The argument that this budget doesn’t have tax increases [on everyone] is, I think, an 'Alice in Wonderland' view of the budget," he said.

He challenged the budget's math on cutting the debt: "When you take the deficit and quadruple it and then you cut it and half, that’s like taking four steps back and two steps forward. That's not making any progress; you’re still going backwards."
And here's Warren Buffett on the plan to throw money everywhere:

I don't think anybody on December 7th would have said a `war is a terrible thing to waste, and therefore we're going to try and ram through a whole bunch of things and--but we expect to--expect the other party to unite behind us on the--on the big problem.' It's just a mistake, I think, when you've got one overriding objective, to try and muddle it up with a bunch of other things.
It's hard to believe I once flipped out over a half-trillion dollar deficit when deficits for the next decade will rarely fall below that level even if you accept Obama's delusional growth estimates.

5 comments:

Anonymous said...

China owned $60 billion in U.S. Treasuries as of December 31, 2000. It owns more than a trillion today. Gosh... that could almost pay for a war!

Mortgaging the country over the past eight years didn't much trouble the economic enablers of the right. But Chinese fundraising drove them berserk in 1997.

Still, instant outrage is better than none. So Obama sucks; what's the counterproposal here? Let it all fail? Cut taxes? Denounce gay marriage? Share the conservatives' grand solution.

Eric said...

OK, I'll give it a shot:

Cancel all spending from the massive Porkulus bill scheduled for 2010 or later.

Cancel the slow-motion bailout of AIG and the banks which isn't working anyway. Let them go into chapter 11 and restructure. Instead, put the money into shoring up the FDIC so regular Americans can have their saving protected.

Lower corporate taxes which are now the second-highest in the world, so businesses can expand and create jobs.

Reform entitlement spending NOW instead of waiting for the Baby Boomers to bankrupt us all.

Cancel the mortgage bailout which only rewards the irresponsible.

Forget about bailing out the automakers. Only bankruptcy restructuring can solve their long-term problems.

I think that's enough for now.

Anonymous said...

I was somewhat unclear. We know that other economic ideas exist. I'm a liberal and I think we should raise Social Security eligibility to 67 immediately.

What I should have asked is: could you identify a prominent Republican leader and his alternate, workable solution? McConnell is "blasting" earmarks on TV while grabbing them with both hands. Boehner's "plan" is to throw taxpayers a thousand bucks per child while suspending the capital gains tax. For the past 20 years, the Republicans have been a wedge party, not a fix-it party. Their damaged status is largely due to their having been out to lunch (on a corporate card).

I've been reading this blog and you seem far more sensible than your GOP representatives. Do you know of any notable Senate/House exceptions who are saying something more to Obama than "socialism," "Pelosi," and "no no no"?

Eric said...

Well, honestly, no I can't name a party leader who has articulated a clear alternative. Which is why the GOP is a walking-dead party.

Eric Cantor was on "Meet the Press" this morning and he was pitiful in apologizing for overspending when the Republicans controlled Congress. He agreed with John McCain who said the GOP spent like "drunken sailors." It's too late, baby, it's too late.

I'm not reflexively opposed to spending. What I'm opposed to is a goverment that does not tax its citizens for the spending it does. Instead it borrows the money and "taxes" us in a dozen different ways by draining capital from the system.

Eric said...

Wait! I had more to say!

If Americans had to pay for the government they got, they would scream like banshees at the Porkulus bill. Borrowing from China has become the lie we all tell ourselves.

Honestly, I wish somebody would focus on just that one truth, that we can't keep borrowing our way to prosperity.