Why US Debt to China is a Political Facade- Thomas White

Thomas White

Professor Shirk

Blog Post 3

10.27.2021


Why US Debt to China is a Political Facade


   

    The media in the United States is, for the most part, privately funded. Massive corporations whose goals may include having an educated populace, however, this is not their main focus. Educating citizens is superseded by turning a profit, so news outlets want headline-driven stories that inspire clicks. The 21st century is all about clicks, and the news media is no different. Alike to the news media, one of the best strategies for Politicians in the modern American political climate is to be controversial while stoking fear of change into the hearts of American voters. Fear is a tactic that has been prevalent for decades, however, the click-driven media inherently props it up. Issues regarding jobs, immigration, and terrorism have all been manipulated by fear-mongering to push agendas that have had dire consequences. One of these examples is the national debt, specifically to China. Politicians love to push the narrative that one day all Americans will pay the price of China being a creditor, and that ‘we owe’ them one trillion dollars. 

    Currently, the United States owes China one trillion dollars and around 30 trillion in total. This sounds terrifying, especially out of context, which is why the media loves to run with anything regarding the negatives. However, context is the point of this blog post; there are two main reasons why the debt to China is, in reality, not as much doomsday as many would like to suggest. The first is that the majority of the debt is owed to United States citizens themselves, 22 trillion dollars worth. Typically, the headline is that the US is in debt 30 trillion dollars, but newscasters typically never break it down. Only about 6 trillion dollars of the debt is owed to foreign powers, and while that still is a lot, it is about ⅕ of the total debt. Secondarily, the debt itself is a lot less worrisome than some may make it out to be. It is very easy to paint the picture, that the debt is looming over the heads of current American’s and future generations of American’s and that one day China will come knocking, to collect their debt.

    Although China can in theory call in its debt, there are multiple reasons why it will not. For starters, the debt is not just one single entity, it is a collection of bonds and things of that nature owned by the Chinese government to help stimulate their economy. It is relatively unrealistic to simply ask for the money upfront in that sense. The other, more pressing issue, is that the United States simply cannot pay one trillion dollars at random, and even if it could, it would cause either a recession or more likely economic collapse. Adding on to the catastrophe, due to the nature of the globalized economy, where so much of its structure is within the United States’ system, the world economy would most likely collapse as well. Another pitfall is that the price of goods made in America would spike downwards, leading to Americans buying American goods, and no longer being able to afford the newly expensive Chinese-made goods. This would then have the domino effect of spiraling the Chinese economy downwards, and again would probably lead to global economic failure, as the US and China are two of the most important markets on Earth. So, even if politicians such as Sarah Palin, for example, want to liken the US’ relationship with China economically to being enslaved by the far East, in reality, it is not the case (Bump). Palin and others who love fear-mongering tactics use rhetoric such as this and have been able to turn an issue that in reality should not be high on our priority list as a political topic. 

    Overall, something that international politics, specifically with an economic based lens can prove is that debts to foreign nations may sound scary in theory, but in reality there is no real way for them to be a catastrophic threat to the United States, especially not the average citizen. It is neither beneficial to China or the US for China to cash in on these debts, so there really is no true situation where that would happen. However, until privatized media is abolished, or at least regulated more, networks such as CNN will air speeches such as the one given by Palin, which leads to disinformation spread around intergovernmental debt (Bump). Politicians can and will continue to manipulate the media to push their agenda’s, and specifically in this case they will shape citizens viewpoints on a subject that they are most likely not very educated about. 













Works Cited

Bump, Philip. “Palin: 'This Isn't Racist,' but Debt Is 'like Slavery'.” The Atlantic, Atlantic Media Company, 18 Nov. 2013, https://www.theatlantic.com/politics/archive/2013/11/palin-isnt-racist-debt-slavery/355165/.


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Comments

  1. Eli WebbOctober 27, 2021 at 1:14 PM

    Thomas, I am fascinated with this blog post you just made. I have always wondered about our debt, not just how big it is, but the effects and hardships we face from it, which I guess is not much. Which still does not really make sense to me, I mean, how can debt just not be paid off and everything is good? That makes me wonder if the Chinese government is keeping it over us and that hurts our relations with them, or like what you said, it really is just a facade that politicians and the media use to scare people into voting for their political side. I really do not understand how we made it to 30 trillion in debt, that just seems ridiculous, but we progress and continue to be the dominant force on the global scale? Crazy. Anyways, I thought you answered lots of questions that I had about our debt, and I really liked how you talked about both the Chinese economy and U.S. economy and the backfires that would happen to both if the debt were to be fixed.
    One question that I still consider is how one of the most powerful nations in the world for over a century has become such a debtor compared to Japan and China who are creditors?

    ReplyDelete
    Replies
    1. Thomas WNovember 15, 2021 at 7:17 AM

      I mean Eli I think its sort of a strange relationship... like sort of a chicken and the egg issue. I personally believe it would be in China's best interest for the American public to freak out about this debt, because it breaks the American system like all fear mongering does. So, they want to continue to stoke this idea that the debt is "bad". Obviously, its not a "good" thing that we 'owe' the world multiple billion, however i think pejorative terms like good and bad are also the issue. I don't know enough yet, but from my current understanding those types of words dont really help, because there is so much added meaning with them. But yeah, honestly debt internationally is something I want to know more about too, because its wicked confusing. I think that the more educated on debt we as citizens (you and me, random people, whoever), the more prosperous of a state we will be.

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  2. Ellie StephensonNovember 1, 2021 at 2:05 PM

    This is a really eye-opening piece. Although I did know that the media blows many things out of proportion, and that politicians often contribute to this misinformation, I had never considered it in the context of our debt to China. I found it particularly interesting to consider the consequences of china actually collecting our debt because it made the threat seem a lot more alarming. One question I do have, however, is if China never collects its debt, how will this be reflected in their economy or the US's? Will this debt continue to grow without China ever collecting it?

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    Replies
    1. Thomas WNovember 15, 2021 at 7:22 AM

      Honestly Ellie, I don't really know. From my understanding continuing the debt and increasing it probably is not the best thing, but it also isn't the end of the world, nor the start of American slavery to China (as Palin put it). But yeah, thats a really good question and something I want to look into. As a side note, some of the research I did said that its essentially a compliment to the US economy, because the US dollar is the standard, China wants in on having some of it (the bonds). Basically, the point of this piece is that most Americans (including myself) are very uneducated on this subject and that allows political leaders to manipulate us in order to push their hidden motives.

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