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Originally Posted by sesame
Did you not read this from the wall st. Journal, Tracy?
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China and other countries who hold our debt would certainly rather they did not have to abandon the dollar because they have so much of their wealth tied into the dollar. The fact remains though, the US will never be able to pay down its debt. Politicians have convinced the American people that they are entitled to so much from the government that we won't be able to decrease the amount we spend. Obama's administration now tells us we are entitled to succeed. Otherwise we'll get a bailout.
So while China and other countries would dearly love for us to pay back our debt, they will come to the realization that we will not. Maybe they have already come to this realization. It will certainly be painful for them to switch currencies, but more and more their economy, and the world's economy is based on trading US IOUs that they will realize is worthless. That cannot continue forever. Because of our recession and decreased demand for products from China, they are laying off millions. Meanwhile, the international community is wanting them to put environmental regulations in place while they produce for us. They have said they want us to foot that bill since we're the ones benefiting from it. So in the future, whether or not they decouple their economy from the dollar, they will agree to take on less and less of our debt.
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Originally Posted by sesame
Tracycoxx: "we're a nation of consumers rather than producers"
Prove, sister, prove! Please provide logic and facts to back up your statements. It sounds interesting though! Does the US produce nothing? Does it not add anything to the world economy, but only consume? Thats ridiculous!
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If we add to the world economy, why is our debt increasing? If we can't produce tangible products, we're not going to lower our debt. We used to have a huge manufacturing base. Bit by bit companies have called on international companies to produce those products for tax reasons, fewer regulations, cheaper labor, etc. Just about everything you own has "Made in China" or somewhere stamped on it.