How much does the American government owe the Chinese and how does it break
down to you and I?
In a recent magazine article, there are reports it comes down to $4000 per Chinese citizen. You’re reading that right. And the number is
astonishing with most American citizens unaware of the entire arrangement which could ultimately impact the U.S. government. It’s complicated and a bit disconcerting to think that the U.S. Government keeps borrowing money while the Chinese keep saving it.
In a new report just out, if one was to break it down that’s the amount that each average American owes the average Chinese person. The Agonist is reporting on a recent essay by James Fallows that Chinese leaders are holding down the living standards for their people, and in doing so have created a surplus of $1.4 trillion dollars.
The number, according to Fallows reported in The Atlantic, is increasing at roughly $1 billion dollars a day and has sucked about 22 percent of the typical Chinese budget in daily living standards. And where, you may ask, is that money?
U.S. Treasury bonds is the main place, according to Fallows’ article.
When you consider that China has only been in the free trade market for roughly 25 years, the news is especially startling. And economists cite that this this trend cannot last. For the Chinese, it is currently a matter of living on “less than” but for Americans, it has meant cheaper Chinese made products, lower interest rates and reduced mortgages.
But political tensions in both countries could eventually put a strain on the situation as well as possible “hyperinflation” within China as the government continues to save astronomical amounts of money.
And the United States keeps receiving a billion dollars a day from the Chinese.
The U.S. and China don’t always get along, needless to say. If the U.S. lost that daily “allowance” it bears to ask, how would it affect both country’s economies?
That’s a lot to think about.
The Agonist also has a link to the 2006 per capita GDP numbers as well.
It’s sobering news on many levels.
