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.
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?
Worse than the Great Depression?
From CNN's Jack Cafferty:
The financial crisis that's consuming the U.S. along with the rest of the world is worse than the Great Depression, and more along the lines of the collapse of the Soviet Union.
Three boys play marbles in a dirt alley, 1930s. Financier George Soros says the current financial crisis is worse than the Great Depression.
That's according to renowned billionaire investor George Soros.
He points to the September collapse of Lehman Brothers as a turning point. Said Soros, "The economy went into freefall and is still falling and we don't know where the bottom will be until we get there and there's no sign that we are anywhere near a bottom."
Soros describes the collapsed financial system as still being on "life support" since that point. He says the current turmoil can be traced back to the financial deregulation of the 1980s, and that it marks the end of the free-market model.
There's more. Soros believes the Obama administration's plan to buy bad assets from banks won't be enough to get our financial institutions to start lending again. Instead – he suggests injecting capital directly into the banks.
Meanwhile – it looks like most Americans sense we're headed to a pretty dangerous place. A new CNN/Opinion Research Corporation poll shows that 73 percent of those surveyed are "scared" about the way things are going in the country today. That's up 6 points from October.
Here’s my question to you: What does it mean when one top investor says the economic crisis is worse than the Great Depression?
Interested to know which ones made it on air?
Realistic to halve the deficit by 2013?
From CNN's Jack Cafferty:
President Obama is vowing to cut the budget deficit in half by the end of his first term.
President Obama vowed to halve the deficit at the White House today.
The president says the deficit needs to be brought under control, adding that the country "cannot and will not sustain deficits like this without end."
The White House says it's inherited a $1.3 trillion dollar deficit, and that Mr. Obama's budget will bring the deficit to $533 billion by 2013. And the cow jumped over the moon.
Some private analysts estimate that this year's deficit could soar to more than $1.5 trillion when you take into account the cost of the recently-passed stimulus package.
Administration officials say they plan to cut the deficit by winding down the war in Iraq and by raising taxes on those who make more than $250,000 a year. The president also says he'd like to bring back a pay-as-you-go policy on federal spending programs, to get rid of programs that don't work and end tax breaks for companies that send jobs overseas.
Here's the problem - it's all well and good for President Obama to talk about reducing the deficit, but that money could end up being just a drop in the bucket compared to the trillions of taxpayer dollars we're spending on economic stimulus packages, bailing out the banks, auto companies, you name it.
Here’s my question to you: How realistic is it for President Obama to plan to halve the deficit by the end of his first term?
@jackcafferty on Twitter
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