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February 23rd, 2009
06:00 PM ET

What if China stops buying U.S. debt?

From CNN's Jack Cafferty:

Secretary of State Hillary Clinton is calling on China to keep buying U.S. debt.

What if China stops buying U.S. debt?

Secretary Clinton urged the Chinese government to continue buying U.S. debt.

During her first overseas trip as the country's top diplomat, Clinton asked Beijing to keep purchasing U.S.Treasury bonds despite our deteriorating economic condition. She also talked about the importance of the administration's economic stimulus package. Clinton says because our economies are so intertwined, it could hurt China if the U.S. couldn't finance the nearly $790 billion stimulus plan.

"We are in the same boat. Thankfully, we are rowing in the same direction, toward landfall," said Clinton. She added that China and the United States "are truly going to rise or fall together."

But this call from the Obama administration shows just how the balance of power is shifting between the U.S. and China. If the Chinese decided to stop buying our debt, or if they decide tomorrow to cash out the more than $1 trillion they already own, we'd be in deep trouble.

The Chinese Foreign Minister didn't promise to keep buying our Treasuries. Instead he said his government would buy the bonds if they continue to represent the best investment when it comes to value, low risk and liquidity.

Meanwhile, although Clinton made clear her support for human rights, she didn't take any meetings with high-profile dissidents. Perhaps now is not the time to tick off the Chinese government- when we're asking for hundreds of billions of dollars.

Here’s my question to you: What would happen if China suddenly stopped buying U.S. Treasury bonds?

Interested to know which ones made it on air?

Julie writes:
Our economy would certainly fall apart. I'm more worried about what happens when China realizes that to a certain extent, they have more power in this situation than the U.S. does and asks us to start paying them. If China took charge this minute, we'd be a third-world country in a matter of days.

Bill from New Jersey writes:
I guess if they stop buying our paper, it would be real bad. On the other hand, how much better would it be if they keep buying it? As little as I like owing my soul to a US bank, I detest the idea of having it in hock to a Chinese one even more.

Luis from Miami writes:
Now we see how vulnerable we've become to China. We're afraid to even speak the truth to them about human rights because of what they could do to us economically. We've gotten ourselves into quite a deep pit.

Bill from North Carolina writes:
What if China stops buying U.S. debt? ... Then we stop buying Chinese products and both countries go under.

Scott writes:
If the Chinese stop buying debt, the US government MIGHT finally have to balance its books, quit giving lavish pay and benefits to unnecessary government workers, and get back to doing the people's work. Short-term pain, but long-term gain if the vampires in DC didn't have a source of funds for the massive debts they've run up in the past 20-30 years.

Jason in New Orleans writes:
If China stops buying U.S. debt, we're all screwed. So, they won't stop. Secretary Clinton was right. We're so closely tied together that we will rise and fall together.

Dave writes:
If China stopped loaning us money, I would wonder if the Saudis would step up and loan us money. The real question isn't who can answer the 3am call, but who is on the other end of the phone and will they accept a payment plan.


Filed under: China
soundoff (129 Responses)
  1. Randy from Salt Lake City

    If China stops buying US debt, we're doomed, DOOMED I TELL YOU!!

    February 23, 2009 at 12:52 pm |
  2. Kevin in Dallas, TX

    We might have to become fiscally responsible.

    February 23, 2009 at 12:53 pm |
  3. Eric Bracke, Fort Collins, CO

    Jack,
    What should happen is that the eyes of congress be opened up and make them realize they're going down the wrong path in managing our funds and start living within there means. However, if China stops buying the bonds, the government will fire up the printing press and begin another "Carter era" of inflation.

    February 23, 2009 at 1:02 pm |
  4. Julie - Kentucky

    They probably won't Jack. After all, if not for the U.S. they woudn't be where they are today. Aren't we the largest country to contribute tp their economy? If we didn't buy all of their crap/junk, they would not have much of an economy. They need us.

    February 23, 2009 at 1:04 pm |
  5. Katiec Pekin, IL

    Isn't it sad that our country has gotten itself into a situation of depending on a country like China to bail us out??
    I would hope we would somehow survive, but do not know how.
    What a mess these politicians have gotten us into.

    February 23, 2009 at 1:15 pm |
  6. Paulette,Dallas,PA

    The US would be up the creek without a paddle.

    February 23, 2009 at 1:25 pm |
  7. Kyle Irvine, CA

    I don't know Jack! and thats what bothers me

    February 23, 2009 at 1:27 pm |
  8. Jenna Wade

    What would happen if China suddenly stopped buying U.S. Treasury bonds?

    Simply, WE'D BE SCREWED.

    Jenna
    Roseville CA

    February 23, 2009 at 1:29 pm |
  9. Dave, Brooklyn, NY

    It means that we will get exactly what we deserve for making incredibly stupid decisions in our materialistic purchases of homes we couldn’t afford and not the least of the dumb decisions was electing Bush twice. That’s how we got here.

    February 23, 2009 at 1:40 pm |
  10. Sue -Idaho

    Easy, the U.S. should file Bankruptcy and call in all our notes!

    February 23, 2009 at 1:41 pm |
  11. stan in south jersey

    if china stopped buying our treasury notes, I would like to believe we would stop buying china's products. imagine Wal-mart selling American products.
    that could be worse than the banks failing...

    February 23, 2009 at 1:51 pm |
  12. Jason, Koloa, HI

    I'd quit my job, grab a fishing pole, and look for puka shells on the beach. It's good to have a fallback plan. Did you want a coconut or a mango Jack?

    February 23, 2009 at 1:51 pm |
  13. keepitreal50

    We would need to learn to speak Chinese, for the new the owners.

    February 23, 2009 at 1:55 pm |
  14. Christine, Edmeston NY

    China is poised to assume a global domination unlike anything that prior circumstances in history would have allowed. I am afraid that we are now in a position that depends uncomfortably on the cards in the hands of the Chinese government. Hillary Clinton need not envy the challenges of the presidency-her role as Secretary of State has come at a most crucial and historic time.

    February 23, 2009 at 1:56 pm |
  15. Mark in OKC

    When that happens, we can call this mess the "Great, Great Depression."

    February 23, 2009 at 2:00 pm |
  16. Terry from North Carolina

    Jack
    If China stops buying US Treasury Bonds we will have to find another sucker although they are getting harder to find. Lets ask Alan Greenspan what we should do he has all the answers.

    February 23, 2009 at 2:02 pm |
  17. Judy, Exeter, Calif,

    Foreclose on us, and sell to the highest bidder.

    February 23, 2009 at 2:02 pm |
  18. Billy G in Las Vegas

    if the Chinese stop bankrolling our debt, it could make the Great Depression look like "the good old days". we would be Germany in the 1920 with hyperinflation making the US Dollar worthless in the world economy.

    btw, the Chinese are Communists and Lenin said "The best way to destroy the capitalist system is to debauch the currency". that could have been their plan all along.

    February 23, 2009 at 2:03 pm |
  19. Kris

    Then the world would get to see what a real global financial crisis looks like and the US would see rioting, breadlines and ugliness that is hard to even imagine.

    February 23, 2009 at 2:35 pm |
  20. Ed Reed

    Game over, turn out the lights. We'll all be living in a Hoover shanty town or a Bush shanty town, whatever they will call them. I guess we shouldn't have run up the debt by $5 trillion during the Bush years.

    Ed Reed
    Port Aransas, TX

    February 23, 2009 at 2:35 pm |
  21. Melissa

    Honestly? I don't know. Nothing good. But maybe the US will be forced to rethink its insanely pro-money policies and actually take care of its people instead of cater to big business.

    February 23, 2009 at 2:41 pm |
  22. Anna, Missouri

    There is no way the Chinese will stop buying our debt. If Americans stops buying their junk they will go into a greater depression than the great depression. Our debt to GDP ratio is still much less than most countries. They need us just as bad as we need them.

    February 23, 2009 at 2:41 pm |
  23. Michael, Liverpool, NY

    How much are those bonds Jack. Can anyone buy some because if they can maybe we can still solve our own problem by buying those bonds and prevent the country from being conquered by China the really old fashioned way, buying us out. If that is the case then thank you China for not Buying our country from us.

    February 23, 2009 at 2:42 pm |
  24. Simon in Syracuse, NY

    We would have to raise all of our daughters to be Octomoms for the necessary revenues.

    February 23, 2009 at 2:46 pm |
  25. Dan, Chantilly VA

    This is how wars get started. Desperate times, desperate people, and an evil enemy to blame for our troubles (even if they're innocent or only one of many contributors).

    February 23, 2009 at 2:51 pm |
  26. Gigi

    If China quits buying the US treasury bonds. Pres. Obama may have to go after those CEO's bank accounts that needed bailed out after they robed their own business... to live the good life. Instead of investing in their business or America. Its funny these so called smart CEO's forgot there is a "moral payday" .
    It would be nice if we trusted our government enough to invest ourselves, but that fruit jar in the back yard seems to be safer place

    February 23, 2009 at 2:51 pm |
  27. Chad Jarman--Los Angeles

    Just sell to India at a discount.

    February 23, 2009 at 2:51 pm |
  28. Gary of El Centro, Ca

    They won't do that, because we might stop buying all the products they ship to us by the boat load and then their economy would tank just like ours. We need each other.

    February 23, 2009 at 2:57 pm |
  29. Tom, Avon, Me, The Heart of Democracy

    China will support us. Our extremely competent Secretary of State was making nice. I believe in her and this government.

    February 23, 2009 at 3:01 pm |
  30. Kiran Mandava

    If not China Japan will buy or Korea will do. Why worry? USA is an elephant which is worth a million whether it is alive or dead!

    February 23, 2009 at 3:03 pm |
  31. jim Toronto

    Anarchy!....at Wal Mart

    February 23, 2009 at 3:06 pm |
  32. Jay in Texas

    I don't know. Maybe you should ask the big money boys as they are the ones who will be hurt the most.
    Brownwood, Texas

    February 23, 2009 at 3:50 pm |
  33. Laura

    If that happens Jack then we can say 'Great Great Depreciation'. People will be throwing their money in the street so to speak since it will be totally useless.

    But hey lets not worry about that right now...after all we have our $13 stimulus check to energize the lack luster economy. Trouble is since the Stimulus Bill was passed someone forgot to tell Wall Street. Maybe they were hoping for $25 per week.

    February 23, 2009 at 3:51 pm |
  34. Jon (Stuart, VA)

    Well Jack, if China stopped buying our government’s debt then the dollar would “everything else equal” go through a period of very high inflation.

    February 23, 2009 at 3:56 pm |
  35. Dre

    1) The US dollar would collapse and we'd make Zimbabwe look fiscally prudent.
    2) The whole world economy would collapse.
    3) China (and everyone else) would never get repaid for all the debt they already bought.

    I'm guessing that China's not eager for this outcome, so I don't worry about it too much. If I did, I'd be building a bunker to store my gold and ammo. Maybe we should pull out of our foreign wars and stop running up so much debt.

    Boston, MA

    February 23, 2009 at 4:00 pm |
  36. Scott, Wichita

    Well, I've already got a Little Red Book, Jack, but Borders is going to run out of them quickly...

    February 23, 2009 at 4:01 pm |
  37. Darin in Denver

    We'd be looking at the fall of the United States as we know it.

    February 23, 2009 at 4:03 pm |
  38. Chris - Denver

    Interest rates would skyrocket, unemployment would surge, and US demand for Chinese-made goods would plummet further. Of course, China knows this, so I don't expect them to suddenly stop buying US treasuries any time soon.

    February 23, 2009 at 4:06 pm |
  39. Diane, Barneveld, NY

    Nothing. They already own us. If they cashed in the bonds, they might want to install their own government if we can't pay up to seal the deal.

    February 23, 2009 at 4:08 pm |
  40. Canaman

    Then, screwed we are, Jack!!

    February 23, 2009 at 4:08 pm |
  41. Joe Sephus, NJ

    Jack, . . .it means that people will stop being afraid of the repo man.

    They know he's not coming all the way from China.

    February 23, 2009 at 4:10 pm |
  42. David

    Man we would be in trouble. But they would be too if we're not buying made in China goods then they will go broke too. So they need us to get back on the right track.

    February 23, 2009 at 4:12 pm |
  43. Alan-Buxton, Maine

    We might have to learn to live within our means for a change.

    February 23, 2009 at 4:15 pm |
  44. Mark from Naprerville IL

    I would stop buying toilet paper and just use my US dollar bills. The toilet paper will be more valuable.

    Mark for Naperville, IL

    February 23, 2009 at 4:21 pm |
  45. jake

    if china stopped buying us bonds, both economies would collapse. the us would obviously lose out, but china would also lose its largest trading partner and one of the major reasons for its unprecedented growth. its a damned if you do, so don't situation for everyone.

    February 23, 2009 at 4:22 pm |
  46. Nas

    Sell to Pakistan????

    February 23, 2009 at 4:31 pm |
  47. Charlie in Oklahoma

    Jack, it would be for the better if they did.
    In fact, instead of buying bonds why don't they buy product
    from the U.S.???

    February 23, 2009 at 4:34 pm |
  48. AndyZ Lynn, MA

    I would immediately stop buying Moo Goo Gai Pan. That'll learn 'em!

    February 23, 2009 at 4:40 pm |
  49. Irv Lilley

    Jack, If China stopped buying our debt, they would have no one to sell their exports to.

    February 23, 2009 at 4:45 pm |
  50. Eric

    I'll tell you what happens when (not IF) the Chinese stop buying U.S. debt.

    Obama and the Dems will simply fire up the printing presses and churn out more Monopoly money. I'm searching for a big enough wheelbarrow to carry the downpayment on the pack of gum I want. Do you think a dump truck would hold it all?

    February 23, 2009 at 4:51 pm |
  51. Bob in Indiana

    We would be seeking welfare from Saudi Arabia.

    February 23, 2009 at 4:57 pm |
  52. Roland (St George, UT)

    We'll be in deep Chow Yuk.

    February 23, 2009 at 4:58 pm |
  53. JUDITH

    It means they will eventually owned the whole US and we will be required to learn Chinese. End of story.

    February 23, 2009 at 5:20 pm |
  54. Sean

    Good to know we are still in bed with the worst government in the world. They must still love the Clintons since we helped them with the technology to aim their nuclear warheads at us.

    February 23, 2009 at 5:24 pm |
  55. Tamika Russell

    President Obama addressing the deficit is bologna. He is just trying to make the GOP happy by addressing the issue. It is totally unrealistic to think a deficit can be closed within the next 4 years. We are in a depression. President Obama is going to ask China for more money when he realizes his stimulus really did nothing to help the suffering Americans. Then China is really going to stop buying our
    treasuries. Isn't China's economy suffering too?

    Tamika- Atlanta, GA

    February 23, 2009 at 5:24 pm |
  56. GM from Mankato MN

    Most of our debt is owned by......guess who? US........The USA.

    Only about 25% is foreign owned.

    February 23, 2009 at 5:29 pm |
  57. Sherry Cravens Indianapolis Indiana

    It means we need to find another nation to sell our valuable bonds . By the way Jack I have a car I would like to sell you. It was driven only on sundays. And knows how to stop itself on the highway.

    February 23, 2009 at 5:30 pm |
  58. Tom in Iowa

    The dollar would become worthless and our entire economy would fall apart.

    Unfortunately that will happen eventually because China will eventually stop buying our bonds and demand their money.

    Tom in Iowa

    February 23, 2009 at 5:32 pm |
  59. Sandy in Arkansas

    Probaby the same thing that has happened to people that our banks have cut their credit card limits, refused credit, etc. – we'd lose our country...not just our homes. There is an end to how much anyone can loan when the means for repayment seem questionable.

    February 23, 2009 at 6:10 pm |
  60. Jake

    Let's put it in realistic perspective – how much of the U.S. that's left actually belongs to the U.S.? Answer: Very little. Almost everything, and I mean almost everything that you can touch and see has been sold to foreign governments including forthcoming generation's futures. The U.S. and it's people are on the verge of bankruptcy due to the corrupt politicians backed by their special interest groups.

    February 23, 2009 at 6:11 pm |
  61. Boston MA

    If they stop buying, we might as well change our names to Chang and get used to eating rice for dinner as they will OWN us.

    February 23, 2009 at 6:11 pm |
  62. Marianne Costello

    Maybe the worst thing that will happen is we will get a threatening fortune cookie!

    February 23, 2009 at 6:11 pm |
  63. Bryon

    Just add est to great.

    February 23, 2009 at 6:11 pm |
  64. Raising4Daughters

    If the Chinese stop buying debt, the US government MIGHT finally have to balance its books, quit giving lavish pay and benefits to unnecessary government workers, and get back to doing the people's work.

    Short-term pain, but long-term gain if the vampires in DC didn't have a source of funds for the massive debts they've run up in the past 20-30 years.

    February 23, 2009 at 6:11 pm |
  65. Jim, Virginia

    It's simple, Jack:

    We'll all be speaking Mandarin...

    February 23, 2009 at 6:12 pm |
  66. Tim from Lowell, MA

    If they stop buying bond.
    Then maybe Americans should stop buying thing made in China.
    On hand washes the other.

    February 23, 2009 at 6:12 pm |
  67. Daniel Sellers

    That wold be crippling to our government. We had better keep them happy. That could be the first attack in a new war aginst America.

    February 23, 2009 at 6:13 pm |
  68. Michael Freedlund

    Jack,

    All I have to say is this is what "Free Trade" and corporate greed has done for our Country. Why buy American when any item can be made cheaper in China. My kids think that the name China on all toys is the name of the toymaker.

    Michael Dallas, Texas

    February 23, 2009 at 6:13 pm |
  69. James T.

    It'll lower the liquidity of our *bonds, raising the rate required for people to invest with us, which would require us to pay out more in the long-run. It could start a continuous spiral downwards...I mean continue this continuous spiral downwards..

    February 23, 2009 at 6:14 pm |
  70. Jim Malmberg

    Well Jack, if that happens we should consider closing our markets to the Chinese. In the end, that could put a lot of Americans back to work. My bet is that over the long haul, they need our consumers lot more than we need their money.

    February 23, 2009 at 6:14 pm |
  71. Jim

    This means that the Chinese economy will keep losing jobs and opportunities and U.S consumers willnot be able to afford buying Chinese goods. The U.S will benefit inthe long run because China will be cut off fot good and the trade deficit will ease up.

    February 23, 2009 at 6:14 pm |
  72. Seth Pedigo KY

    It means that the dollar in your pocket will become worth less than $.01 cent..you're going to need a $1 million note to buy a cheeseburger. Gandhi says “First they ignore you, then they denounce you, and then they say that they knew what you were saying all the time,”

    February 23, 2009 at 6:14 pm |
  73. Rob Marinez

    Jack, It's not if they stop buying, it's when they stop buying, and I hope soon. The problems we face today where caused by free trade, outsourcing and globalization, why would we want to add fuel to this fire. The only cure for what's wrong is PROTECTIONISM.

    February 23, 2009 at 6:14 pm |
  74. Phil, Indiana

    Won't happen, Jack, we're still the only game in town. Over the long haul, nobody is a better value than the USA. They would be shooting themselves in the foot. Who else would buy their junk? That's really our money they're using for buying our bonds.

    February 23, 2009 at 6:15 pm |
  75. Jampa

    Jack we would learn that China has never been our friend. We would learn that real patriotism is in the actions people here in America do for Americans. We will learn that the Clinton's and the Republicans have fooled us and deserted we the people a long time ago.

    Jack we must take our nation first all Americans must realize that beyond the greed of the rich of the last 8 years there are the concerns of we the people. China has never been our friend. Human rights should be the foundation of our national concerns and we should lead the world through human rights.

    February 23, 2009 at 6:15 pm |
  76. Sharon

    If China does continue to buy the bonds, does that give them more power over the US? When the lead paint was recalled and there were stories everyday, didn't China threaten to flood the market with US dollars if the news media didn't stop talking bad about them? What will they require if they buy these bonds now?

    February 23, 2009 at 6:15 pm |
  77. Tom DeSanto

    Jack,

    Real simple.....rampant inflation!!!!!!

    February 23, 2009 at 6:15 pm |
  78. Roberto

    From Montreal Canada.
    The U.S. Dollar would sink, Gold up to at least $2000, Obama can kiss good bye the re-election, Inflation to the roof and Mr. Soros would become poor. Imagine the rest of us? not even money to pay cable to watch you Jack. In the mean while China would suffer a little while becoming the next world economic power. Thank God I'm in Canada.

    February 23, 2009 at 6:15 pm |
  79. Jim/NC

    Since we have given China so much of our manufacturing and busines in general, why don't they reciprocate and buy our goods? The reason: they don't have to...we are suckers in the eyes of the world. Until American citizens understand that we have been had by China, Mexico, congress and the world, nothing will change. China will probably own us if they don't already.

    February 23, 2009 at 6:17 pm |
  80. Grover Dickerson

    Get used to hearing such words as chaos, collapse,and insurrection

    February 23, 2009 at 6:17 pm |
  81. dj barber

    Jack,
    That we're in bed financially with China to begin with is the real problem. That we could live without most all of the products imported from China is easy–that we can't live without their loans is a shame on us. You'll see no more compaints about human rights in China by this government–so can trade with Cuba now be justified?

    February 23, 2009 at 6:17 pm |
  82. Terry

    We are being held hostage by our own greed and notion that we can keep God out of everything and solve everything with sex, money and power. As a result we are stimulating our national debt and China holding us hostage by the debt they are buying. We will continue to go deeper in China's debt until we change our priorities to living the Way, the Truth and the Life of our Lord and start taking personal responsibility instead of waiting for the government to stimulate everything.

    February 23, 2009 at 6:18 pm |
  83. George Fisher

    There are two reasons anyone buys US Treasury bonds: safety and yield.

    Right now, it's safety because the world believes that America is the only country that will never default. If we continue to run deficits and as long as our financial industry is in ruins, people will lose confidence in us.

    Without safety, there's only yield: interest rates will go up as we have to compete with the rest of the world for money from China and the Petro countries.

    February 23, 2009 at 6:19 pm |
  84. lynn

    America should be more concerned about China buying up as many of the world's resources as it can while prices are low.

    February 23, 2009 at 6:19 pm |
  85. Nitrous

    I wouldn't happen because they know Americans won't be buying their precious goods from China. We fuel their economy thanks to companies like Walmart. Just as they have us in a bind. We would eventually put their economy in a vise-grip...

    February 23, 2009 at 6:19 pm |
  86. Conor in Chicago

    It's actually the perfect plan for China. This World Depression is going to cause severe unemployment in China. The only job that will be available to millions of Chinese men will be the army. So, stop buying US debt, unload all of the treasury reserves they have on the open market, watch the United States become financially insolvent and descend into Civil War, and then send their massive army in to "restore order" and conquer us. Oh Canada, you might need to make some room soon. A whole lotta Yanks are probably going to be comin' a knockin'.

    February 23, 2009 at 6:19 pm |
  87. Jeffrey W. Griffith

    If China stopped buying US debt, it would be time to reexamine the Federal Reserve Act, which started the requirement that our government borrow money to back its currency. Repeal of the Act and a return to the fiat currency employed by President Abraham Lincoln would be a far preferable alternative; no borrowing from the thieving big bankers who profit from the Federal Reserve lending regime, and no additional dependence upon the Chinese government, which is a hostile power. It is time for the US to jettison the Federal Reserve scam and its dependence upon the Chinese tyrants. If those steps were taken, this depression could turn out to be a good thing for our country in the long run. Clearly, continuing to depend upon the Fed and China is a recipe for disaster.

    February 23, 2009 at 6:20 pm |
  88. Bryon

    Buy Gold Buy Silver Its 1.3 billion against 300 million.

    February 23, 2009 at 6:21 pm |
  89. Sharon, Rockford, IL

    It is an interesting dilemma considering that we are largely responsible for the rise in their economy. If they stopped lending us money their economy will also tank. We've created a very unusual symbiotic relationship with them with our trade policies. They've taken a good share of our jobs and now they have to send the money back by way of loans. Our government was really ignorant to allow us to get to this point.

    February 23, 2009 at 6:23 pm |
  90. Richard Kilbourne

    Dear Jack:

    I've been saying for years that the accumulation of offshore liabilities is our own Weimar style hyper inflation; just deep freezed. It will be a catastrophe if any of our foreign creditors stop buying our paper; i.e. giving our obligations currency. Should that happen, the Federal Reserve will simply monetize. Yes, there will be a feeding frenzy. Our foreign creditors will carry off anything that is of value, that can be shipped our of the country. And our accumulated foreign debts will wash back over us; a monetary tsunami.

    The money supply will double or triple in a matter of days.

    February 23, 2009 at 6:23 pm |
  91. Jorge

    like "freedom fries" congress would approve renaming them to "Obama fortune cookies"....and then that's all we would afford.

    February 23, 2009 at 6:23 pm |
  92. richard

    our debt would become valuless. We would shut down and become a command economy. China wouls completely collapse. If our debt has no value...china millions of Chinese starve... you have to realize.. we are still in control, China cannot afford to not buy our debt.

    February 23, 2009 at 6:23 pm |
  93. linda

    if they don't lend to us or ask for it back 1- we will go down first but they the Chinese will go down hard right after us and we will never buy their goods again...i remember when in the old days we won't even buy anything coming from China...

    February 23, 2009 at 6:24 pm |
  94. Patrick Welsh

    China's purchases of our debt allows China to keep the value of its currency stable by keeping huge inflationary trade surpluses from being converted back to Renminbi. It also helps us keep our interest rates as low as they are. Last year's strengthening of the Renminbi against the dollar lowered their return on their investments with us because they incurred foreign exchange losses.

    Should China cease buying our debt, it would be hard to keep interest rates as low as they are now. It might lead to a similar decision by Japan to do the same and this too would put upward pressure on interest rates. These events could worsen our present liquidity crisis.

    February 23, 2009 at 6:24 pm |
  95. Walter in Alabame

    Jack : what will happen the dollar would crash around the world our country will Collapse, just to say a few I'm to fearful to think of the rest.

    February 23, 2009 at 6:24 pm |
  96. Ousama

    If China stops purchasing our treasury notes we will be in the same situation as if a massive earthquake hits Japan (God forbid)! The Japanese will recall all assets in the United States for the reconstruction of Japan! So Hillary is right but we do not like to hear the truth … Sometimes!

    Ousama

    February 23, 2009 at 6:25 pm |
  97. John, McCordsville, IN

    I think the question is not what happens IF the Chinese use their financial leverage against us but WHEN. Just the threat of them demanding we repay leaves us with far less influence on the world stage for years to come.

    February 23, 2009 at 6:25 pm |
  98. Passang Tsering

    Jack,

    Kudos to you for bringing up this issue. Politicians and most main stream media had been covering the reality of threat to American values, security and prosperity. A lot had been said in the media about China becoming the next super power. But, who is responsible for this? The politicains who only have the interests of the big business in their agenda. Thats why, manufacturing jobs are relocated to China from here and we continue to buy Chinese goods no matter they are tainted or made by people with inhuman working conditions. Our focus has been on Iran and North Korea when the reality is that China has been behind proliferating Nuclear weapons technology to these so called rough states. In the process, interest of the American people and rights of the people of China including Tibet are crushed silently.

    February 23, 2009 at 6:26 pm |
  99. Diane Dagenais Turbide

    Instead he said his government would buy the bonds if they continue to represent the best investment when it comes to value, low risk and liquidity.

    Jack,

    That is why massive investment in infrastructures and education is extremely important...we have to put people back to work and we have to face poverty head on (plenty of poor people abroad willing to work for less) since poverty is now increasing even more and we have to put the break on this now and by investing in infrastructures, education and green energy sector and major reforms in better government and better banking system! Jack, You have to start looking at the whole plateform and find some ways to see for yourself where the changes are needed and share with us what will be happening since you are all part of the solutions in raising confidence and reduce tensions! That is my personal opinion because of all your personal descency as human beings...media can have a huge and positive impact on people...not asking you to be blind but to be part of showing us everything we have to face together as challenges and solutions!

    Take good care now I have to face supper...much easier! :>)!

    Diane Dagenais Turbide

    February 23, 2009 at 6:26 pm |
  100. Rick Medina,OH

    Jack,

    Throughout history, governments have repudiated debt, usually through inflation. Fasten your seatbelts, folks, the $1 'Quarterpounder' will soon be history.

    Rick, OH

    February 23, 2009 at 6:26 pm |
  101. Will Adams

    Republicans would actually have to suck it up and pay higher taxes to afford the things they want (like the trillion dollar wars they support) as opposed to borrowing money from China and others to pay for them and making future generations pick up their tab.

    February 23, 2009 at 6:27 pm |
  102. Hardlaborer

    If China doesn't buy our debt, then we can't but their goods. China implodes.

    February 23, 2009 at 6:27 pm |
  103. Richard Green

    Jack,
    If China stopped buying our bonds, we would have to increase the return on them to attract new buyers. Maybe some of the banks that are hoarding the billions we've given them would be induced to buy the bonds? Then instead of China owning us, the banks would own us. [ They only own Congress right now.] We would also have to issue fewer bonds because of the high interest we'd be paying, and we'd have to live more within our means. Maybe we could alllow bad businesses and investment houses to fail without taking tax payer money with them.

    Rich Green
    San Clemente, Cal.

    February 23, 2009 at 6:28 pm |
  104. Sally-Michigan

    We're screwed. Ask the Republicans-they got us into this mess. Oh, I forgot, they don't think we need a stimulus package to help the American people and therefore we don't need to have help from China-well, unless it's a war in Irag-that's okay. Maybe one of the Republican governors who plan on running for President next time
    (you know the ones who are "rejecting the stimulus to make a name for themselves")have an answer.

    February 23, 2009 at 6:28 pm |
  105. Will Adams

    Republicans would actually have to suck it up and pay higher taxes to afford the things they want (like the trillion dollar wars they support) as opposed to borrowing money from China and others to pay for them and making future generations pick up their tab.

    Atlanta

    February 23, 2009 at 6:28 pm |
  106. Sheri

    The Chinese economy is directly related to the U.S economy. They make all our "stuff". If we stop buying the "stuff" their people will be out of work. I believe there will be a lag time before they feel it or see it but the Chinese know this. That is why they loan us the money and will continue to do so. We (the Chinese and the U.S. really are in this together), At this point any way.

    February 23, 2009 at 6:28 pm |
  107. Fred Roosli

    The US dollar value would plunge to lows never seen before, greatly diminishing the value of the trillion dollars in equity they currently hold. The low dollar value would increase the price for their exports, making them unaffordable in this country. A great export boom to China would follow with Walmart selling US produced goods in Bejiing at prices Chinese domestic production could not match. The Chinese are a lot smarter than not underwriting stimulus I, stimulus II, stimulus III and so forth. No worries here about that.

    February 23, 2009 at 6:28 pm |
  108. David

    I don't accept the premise of this question. China's economy has reached a level that could not be sustained without the exports they send to us. They may not have as far to fall as we do, but their economy would suffer massively if they stopped financing our deficits. That said, our treasury interest rates would rise pretty dramatically. Corporate yields would rise but not nearly as much. The dollar would strengthen versus other currencies. Other countries would remain large buyers of our debt and would probably increase their level of purchases due to the higher yields. The yield curve would steepen significantly. More expensive financing might provide some measure of discipline on the federal government and reduce their abuse of deficit spending. But, I wouldn't hold my breath on that one.

    February 23, 2009 at 6:28 pm |
  109. Tony

    I understand that Hillary Clinton visited China to ascertain exactly how much the USA is in debt to China which G W Bush arranged. By-the way this is a Socialist/ Communist country. Its a strange phenomenon that all Republicans constantly criticize socialist and communist countries , but the good old capitalist USA, can only get credit from these countries. The USA would be bankrupt with out the help of socialist and communist countries. Its about time that every American President has to balance the books before leaving office and this should also apply to President Obama.

    Americans cant keep expecting the rest of the world to bail them out, its about time they stood on there on two feet and accepted there responsibility’s to manage there countrys finances correctly, instead of spending money they dont have.

    February 23, 2009 at 6:28 pm |
  110. Sal Molinari

    The buffoons running wall street, the banks along with the idiot politicians have put this country in great peril are the same idiots who are trying to fix the problem. No one knows better than the people, nothing for the auto industry, let the banks fail but make sure the money goes to house and feed the people. The people are always right, to think otherwise shows the arrogance of the buffoons. Take back your country.

    Sal

    February 23, 2009 at 6:28 pm |
  111. glhea

    If we were not practicing false economics would be no problem. then again if we were practicing true economics most of the rest of the world would still be huddling around the old fire pit. not a bad idea.

    February 23, 2009 at 6:30 pm |
  112. Purnell Kankakee lL.

    We will see the whole truth finally!

    February 23, 2009 at 6:30 pm |
  113. hector

    Your network will have to rename the Situation Room 情况室 in chinese

    February 23, 2009 at 6:30 pm |
  114. george lewis

    Dear Jack,
    It isn't "IF" China stops buying, it's "WHEN" they stop buying! We
    pray to God that our new president will be successful in turning things
    around. But China has us right where they want us. They can put us
    on our knees at will. It disturbs me to know they have the wealth to
    control our economy.
    George Lewis

    February 23, 2009 at 6:30 pm |
  115. heimo

    People in the States seem to overlook that Europe, including Russia is also adding billions of Euro to their stimulus packages. They also look to China. How much appetite do these folks in Beijing have to buy our debt? We better look for alternatives.

    February 23, 2009 at 6:30 pm |
  116. Hardlaborer

    Our greatest export by far is debt. There is a market for it out there-somewhere.

    February 23, 2009 at 6:30 pm |
  117. Bryon

    Didnt we get into this mess by debt? LETS BORROW MORE.

    February 23, 2009 at 6:31 pm |
  118. Mikey,NC

    Jack I want everyone to walk around their home and see how many of the things they own were made in China?I think they will be shocked when you realize how many of the products are made there.

    February 23, 2009 at 6:31 pm |
  119. Karl from SF, CA

    On a positive note: WHY would they quit buying out Bonds or recall the ones they own now? They aren’t as stupid as whoever thinks they might stop. It is not in their best interest to have our economy fail. It would be the end of their biggest customer and they don’t want to own us. They have enough problems over there; they don’t need our problems, too.

    February 23, 2009 at 6:31 pm |
  120. Robert

    Then we would really see just how well capitalism works!!

    February 23, 2009 at 6:33 pm |
  121. HMS

    What if China stops buying US debt?

    Beijing is covered with a thick layer of smog and a has a glut of vacant property on its hands. It is more important now more than ever for China to clean up its act. If it wishes to hold on to its export market, and keep attracting big spending foreigners. My beloved China will have to become a big investor in the clean and green industry and as will the USA, Canada, and all the other “developed countries”. In china many improvement can and need to be made, as they are here, studies, measurements and standards need to be implemented that may mean hiring foreign companies to come in and help with the designing. China knows major environmental improvements in Chinese cities will improve health and quality of life for an unprecedented number of people. China should really do this for its country now that it has the money, and because I think they are also seeing that you shouldn’t s- where you eat. If they buy our debt what will we have to offer? As we saw at the Oscars last night, these days, the next big thing can come out of anywhere. Clinton has a difficult sell, I hope the halls of innovation allow for lots of movement.

    February 23, 2009 at 6:34 pm |
  122. Matt, Portland, OR

    The United States would no longer be able to fund the bailouts that we've been having, and it wouldn't necessarily be a bad thing. The US stock market could also suffer, but its really not something we can know until it actually happens.

    February 23, 2009 at 6:34 pm |
  123. Chris F

    They won't stop. They will continue to buy it. But they're not just buying debt, they're buying leverage also. So when they finally decide to invade Taiwan the U.S. (whom is allied to Taiwan) Will do nothing because the Chinese have so much leverage over them. And this is just the beginning...

    Chris
    Windsor, Ontario
    Canada

    February 23, 2009 at 6:35 pm |
  124. Brenda WIlliams

    It's simple Jack......jack up interest rates and massively cut spending

    February 23, 2009 at 6:35 pm |
  125. F. J. Burger

    'No problem "IF" ....not 'is'

    February 23, 2009 at 6:35 pm |
  126. DAN, Dallas, TX

    I can say there will be little bit impact if China stop buying U.S. Bonds. There are many other developing countries who still has cofidence in U.S. The one thing I am pretty much sure about is IF U.S. STOP BUYING CHINESE PRODUCTS there will be very very huge impact in China and its Economy. We have lost so many jobs and businesses due to the Outsourcing.

    February 23, 2009 at 6:36 pm |
  127. Jude Ekeocha

    hey,if china stops buying us debt,i think the government will file a bankruptcy in heaven.
    jude,
    bedford street,london.

    February 23, 2009 at 6:45 pm |
  128. Josh Indianapolis Indiana

    It would be difficult if not impossible to survive without one another. China and the U.S.A. would do well to remain on good terms. China should continue buying U.S. debt while we should avoid criticizing China about human rights violations.

    Now is not the time to be xenophobic. During these volatile times it's easy for crisis to lead to conflict.

    February 23, 2009 at 6:45 pm |
  129. Doug - Dallas, TX

    Jack,

    It would mean the USA would have to live within it's means (perish the thought). Congress could not spend more than they take in (I know it's a radical idea) and government agencies would have to live within their budgets. Of course we would have to reduce foreign aid to countries like China which would encourage them to buy more of our debt.

    So the cycle continues.

    February 23, 2009 at 6:46 pm |