Posted by
Always To The Right on Wednesday, February 10, 2010 1:34:04 PM
China holds trillions of dollars of American debt, making them our
primary creditor. Given that China often takes foreign-policy
positions in opposition to our national interests — especially
regarding Iran and Taiwan, the latter of which they consider a domestic
issue — that relationship has always held a certain amount of peril for
our country. Until now, most analysts assumed that China would not do
anything to damage its own economy by manipulating the bond market,
which would cause them damage, but pressure from the military over the
issue of Taiwan could lead to an attack on the American dollar and our financial standing
This threat should underscore the need to significantly reduce federal
spending and conduct the kind of entitlement reform that greatly
reduces our future commitments, not an expensive reform that merely
puts a tiny dent in the upward trajectory of future spending. Our
financial future relies on action now to reduce our vulnerability,
before China or any other creditor can have us stroking into financial
chaos.