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In addition, Greece has always been lax in its tax collection. The United States, like Germany and the other healthy economies of the European Union, have been strict in its tax collection, and Americans are much more willing to pay their taxes than the Greeks have ever been.
The IRS collects only about 85% of taxes actually owed for each year. The rest is lost to tax fraud, a major source of that being deliberate misclassifications of income and expenses by small businesses.
It's funny how many people truly think we go and beg China for money to borrow and they lend it to us, leading to tons of debt. They have no idea that we only technically have any debt to them because they are buying our treasury bonds- an investment on their part.
Most people are mentally fixed to a more personal paradigm of debt.
The understanding of modern fiat money and monetary sovereignty and how they apply to debt are whole other matters. Debt created by a currency issuer is vastly different than one as a currency user.
It's funny how many people truly think we go and beg China for money to borrow and they lend it to us, leading to tons of debt. They have no idea that we only technically have any debt to them because they are buying our treasury bonds- an investment on their part.
Yes, China receives lots of dollars via its exports to the US. They use some of them to buy things from the US. They use some of them to buy things from other countries that will take dollars in payment. There is nothing else left for them to do with the remaining stocks but to invest them in dollar-denominated assets. US Treasuries are a favorite, but they go also into US real estate and into US corporate stocks and bonds. The notion of China as some sort of mafia loan-shark likely to come around and bust our kneecaps one day is just hilarious misapprehension by the worse than seriously under-informed.
Most people are mentally fixed to a more personal paradigm of debt.
They've been told (by terminal liars) that the government should act just like a household does. As if taxing authority and currency-issuing authority made no difference in things at all. LOL!
China isn't even the number one foreign holder now.
They are according to the Treasury Department, and those figures include UK and Caribbean holding agents of the Chinese under those nations, not China.
They are according to the Treasury Department, and those figures include UK and Caribbean holding agents of the Chinese under those nations, not China.
Yes, the two have been bouncing back and forth for a while now.
Quote:
Originally Posted by Lowexpectations
more to the point is this misconception that it's China who "owns" us when japan is right there too
Quite so, and in each case, what's happening is that they are investing in the US. They have no input or control as the result. They cannot "call in" the debt. They essentially entrust us with their money and hope that we take good care of it.
Eventually, China is not going to be in the US currency game for ever. Their goal is to make the renminbi the global exchange currency, thus replacing the U.S. Dollar. They still have quite a ways to go. Generally, the U.S. Isn't gaining more power. It is losing power. All this don't worry is a bit of funny denial. It shows enormous insecurity and arrogance.
China will be a competitor of the USA on various fronts. It's economy will be the worlds largest in the not so distant future. It is acquiring world class infrastructure, including green technologies, modern train networks, and transportation systems. It's middle class will have quite enormous purchasing power, not to mention its huge overseas Chinese consumer population. With money in their hands and more involvement in Europe, central and South America, they will have bigger influence to advance their interests.
Meanwhile, the U.S. And Europe will be coping with economic hardship, unemployment, an education system unfit for globalization, an entitled population that take things for granted, and rising ethnic conflicts and political divisions.
China strategic goals, including territorial, will be balanced by their intricate relations with other economies. But the Chinese will find ways to do what they want while balancing their global connections. They will not give up Taiwan and the islands they disput with Japan and Vietnam. Eventually, we are looking at basically reducing our role in Asia, sharing power with China, and even getting the hell out.
Lee Juan yew, before he died, said that if the U.S. Can't manage China's rise, it must learn to share power with China. There is no other way. I predict that China will also buy up companies, land, properties in the U.S. And exert more power in the American economy and politics. Those who have money call the shots. And China is the one who walks around with a lot of money. In fact, much of their military makes its own money through its own businesses, rather than relying on tax money.
I hate to jazz up China, and they just had a stock fall. But their rise is the story of the 21st century. Make no mistake. And we are fading as a hegemon of the old world that is soon going to see the redistribution of power, money, and privilege, from the west back to Asia. And once that shifts, it won't shift again in the next 300 years.
Venezuela owned significant foreign-denominated debt. In that case, monetary sovereignty doesn't save a nation. The U.S. could meet the same fate if most of our debt was in Euro even if we still used the U.S. dollar. But it's not. This situation is not going to happen.
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