Chinese Jitters Over Absurd $1.3 Trillion Gamble in U.S. Debt

October 7th, 2013

Via: Independent:

China, the biggest foreign creditor of the United States, has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay.

The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking” and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.

“We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,” Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,” he added.

The American government entered its seventh day of shutdown on Monday, following the failure of Congress to approve the national budget a week ago. And there was little sign of progress on the still more crucial issue of the fast-approaching “debt ceiling” deadline. Yet rather than indicating a willingness to negotiate, the Republican Speaker of the House of Representatives, John Boehner, stated on Sunday that it was “time for us to stand and fight” over the budget. He added that a default was “the path we’re on”.

4 Responses to “Chinese Jitters Over Absurd $1.3 Trillion Gamble in U.S. Debt”

  1. Eileen Says:

    I’ve been thinking that Mr. Boner ought to be fired along with a few or more the teahadjists that tell us they are loving America so much that their never ending budget battles have already downgraded our debt. Obama has been President five or more years now and the government has been funded on a continuing resolution ever since. And the deficit that all this “sequestration” about is a joke. Its been reduced by about half – well at least from trillions to billions.
    Oh yeah, very interesting the Chinese are weighing into this shitstorm. And Boner wants to go down the path of default. There are no words in my vocabularly that can ascribe adequate words to what an idiot this man is, has been, and maybe will always be. I’ve been watching reruns of Jon Stewart to keep my sanity.

  2. quintanus Says:

    working at Dept of Energy, my group didn’t get furloughed, but a mixed group of government workers who we need to work with are out. The regulatory agency is 95% furloughed, so this keeps us from planning anything. I was sort of surprised that many furloughed staff at relatively high pay levels are talking about having problems right away if their paycheck doesn’t arrive. I would figure this would be more of a problem for people earning below $40k/year, because are people in higher earning jobs still a couple paychecks from debt? I am always thinking that the human lifespan is longer and due to robots replacing many jobs, there might not be as much work for the future, so you should save a lot during the one or two decades when you are earning well

  3. Uncle Remus Says:

    @Eileen – You can’t possibly believe that merely squabbling over the budget is the underlying reason for the US’ “downgraded debt”, which BTW, is an interesting Freudian slip.

    You dance around it with “Obama has been President five or more years now and the government has been funded on a continuing resolution ever since”.

    And your “teahadjists” is quite the tell.

    The US is bankrupt – no ifs ands or buts. The longer we delay the day of reckoning, the more painful that day will be.

    @quintanus – It’s called cheap credit and no concept of “value” – that’s how relatively high-paid individuals live paycheck-to-paycheck.

    And, the Chinese can do “Kabuki” with the best of them.

  4. j.biddy Says:

    @Uncle Remus – Eileen is correct that the deficit has been reduced, and that was of course after bringing the costs of the Iraq and Afghanistan debacle onto the books by not funding them through supplemental spending bills anymore, which was one of the biggest reasons the deficit went up so drastically in the first two years of Obama’s presidency. It’s important to remember that before the War on Terror the US was running a surplus for four years straight.

    Bankrupt means a pretty specific thing, and if you’re trying to say the U.S. is insolvent that just isn’t the case. The Treasury brings in more than enough to pay the interest on the debt so technically it doesn’t meet the standard of insolvency.

    If you’re trying to make the argument that the credit and finance system itself is a corrupt and non-functioning system I will 100% agree with that argument. For me, the day of reckoning will come when we recognize that the fractional reserve system causes nothing but instability and impoverished masses of people. Hopefully on that day we’ll begin to move to a debt-free money system, essentially a 100% reserve banking system similar to the Chicago plan.

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