Matt Miller
Washington Post
November 24, 2011
We were in a seminar room at the Chinese Executive Leadership Academy in Shanghai. It’s kind of an executive MBA center where rising Communist Party leaders come for training. I was there two weeks ago speaking about the future of capitalism. Since China holds more than $1.1 trillion of U.S. debt, the group was keen to learn when they could expect the United States to get its fiscal house in order.
I gave them the answer I generally give these days when asked that same question at home. Given Republicans’ denial about the need for taxes to rise as we double the number of seniors on Social Security and Medicare, and Democrats’ denial about the need to slow the growth of these huge programs as part of an overall fix, I explained, “We probably won’t get serious about taking these steps until our Chinese creditors tell us we have to.”
They laughed. But after the laugh you could tell my hosts also felt empowered. They have reason to feel that way. Yet from the American point of view, it’s not only not funny, it’s surreal.
According to the IMF, China’s GDP per capita is about $8,400. The United States’ is about $48,000. How can it be that a country nearly six times richer is relying on a country so poor to help finance its current consumption?
The Emergency Election Sale is now live! Get 30% to 60% off our most popular products today!