The headlines should read: World Didn’t End! Sub-head: We didn’t know what we were talking about.
The data for official Chinese purchases of Treasury bonds in 2009 were published yesterday. Verdict: the PRC bought practically nothing. In 2008, official Chinese purchases of US Treasury bonds were equal in size to half our federal budget deficit. Last year they were equal to 2%. That’s not a typo, that’s a ‘2′.
According to the “China is our banker!” hysteria, our interest rates should be soaring. Of course, they aren’t.
The whole idea of China’s financial grip over us is a fiction, and has been from the beginning.
Yes, there is a huge issue here. But it’s us, not China. We’re mortgaging our future because the President and Congress want a government hand in every aspect of business. We can finance our huge deficit without too much trouble, and in 10 years we’ll be very sorry that we could.
China’s purchases of our bonds are not important and never have been. What matters is our elected officials are acting to ruin the economy. Fix our problems first and worry about China second.
Yesterday the American Medical Association announced their support for the Senate version of Obamacare. Which is interesting since both the House and Senate versions of Obamacare cut doctor Medicare reimbursement rates by 20% starting in 2011. If Obamacare were to reinstate these cuts, the plan would add $196 billion to the deficit in the first 10 years and $765 billion in the second decade.
But President Barack Obama promised the American people yesterday: “I just want to be clear, for all those who are continually carping about how this is somehow a big-spending government bill, this cuts our deficit by $132 billion the first 10 years and by over $1 trillion in the second. The argument that opponents are making against this bill does not hold water.”
So either the AMA is misinformed about whether or not Congress and President Obama will save their Medicare reimbursement rates, or President Obama is misinformed when he tells the American people his health care plan will cut the deficit. Both the AMA and the President owe the American people an explanation.