Here’s a letter to the Los Angeles Times:
Eric Weiner writes about the Chinese government that “by simply moving the maturities of some of its $850 billion in Treasury holdings from 90 days to 60 days, it could cause chaos in the U.S. stock markets” (“China’s giant economic sway,” Oct. 9).
Perhaps. $850 billion is, for America, fully 9 percent of its total outstanding government debt held by the public (including foreign governments). But if such chaos ensues, the ultimate blame would be not on creditors who lawfully demand early repayment, but, rather, on Uncle Sam’s outrageously uncontrolled spending. This spending – and the gargantuan debt incurred to fund it – threatens private capital accumulation both today and tomorrow. The increased risk of high inflation, the certainty of higher taxes, and the continued breakdown of any limits on the range of activities funded by the state are prime ingredients in a recipe for significant economic trouble – trouble that any prudent investor might react negatively to.
Sincerely,
Donald J. Boudreaux
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First breath (spoken with hat in hand): “Please lend us plenty of money. It’ll help us to ‘stimulate’ our economy so that it’ll grow.”
Second breath (spoken on the record at a ‘summit’ of ‘leaders’): “How dare you lend us so much money! You are keeping our economy from growing!”
Third breath (spoken loudly and self-righteously on the campaign trail): “Elect me and I will protect us innocent Americans from the scheming, greedy, and devilish Chinese!”
