He's the Devil I tell ya! The Devil!

This is a wee bit simplistic, FB. Foreigners own a great deal of our debt, and an unwieldy budget deficit is ultimately a bad thing for our economy (I won't retype some of my screeching posts about this).

But you have to put it in perspective. The U.S. has run budget deficits over a great deal of its history, and our economy has still managed to stay the strongest in the world. As a percentage of GDP, we ran larger deficits during WWII than we are now, and it was actually pretty healthy for our economy then.

It's not necessarily bad that China is buying our debt. If we are going to run a deficit, it is much worse if they STOP buying our debt. Foreign ownership of so much of our debt is a relatively new phenomenon, so it is a wildcard. In the past, we didn't have to worry about people buying our debt. It didn't get any more credit worthy than U.S. Treasuries. The reason China (and Japan and many other nations) owning our debt works well, is that there is a global interdependency. We have a huge trade imbalance with China, for example. And the system works pretty well. American consumers buy Chinese exports, and they benefit from the flow of inexpensive goods from China. In return, the Chinese buy our government debt. And they benefit from the return on their investment and our continued consumption of their exports. It's a nice, neat little dependency that works pretty well, actually.

Where it gets dangerous is if our debt levels get so high, and the trade imbalance becomes so great, that the foreigners get nervous and stop buying our debt; i.e. if they decide to diversify their portfolios because we look like we might not be able to pay our bills. I think we are getting closer (but not yet dangerously close) to this happening, and I think this administration has created a fiscal mess. But I don't think we are quite there yet. As I said, you have to put it in the proper perspective.

 

Only those on the far left. And as someone who thinks Bush has done an absolutely terrible job, I thought Chavez's rant was embarassing. What a buffoon.