The debt we owe to china is very low (only 6?f all U.S. debt). You have been listening to too much of China's propaganda that is making its way into the U.S. media. China is using propaganda to try to control U.S. economic and foreign policies.
America does not want China to buy our debt. China only buys our debt to devalue its currency so it can create an artificially created trade deficit http://answers.yahoo.com/question/index;_ylt=Alj4h0pkTgQqhhn_2llzJBgjzKIX;_ylv=3?qid=20071023144824AAfmpX7
Also, China owns very little U.S. debt as a percentage of the GDP. China only owns less than 6?f all of the U.S.'s outstanding debt.
U.S. Treasury website: http://www.treas.gov/tic/mfh.txt
Also, the debt is not at historic levels as a percentage of the GDP. Also, the debt to GDP ratio is currently declining. And many other first world countries have far greater debt to GDP ratios. http://www.whitehouse.gov/omb/budget/fy2008/images/outlook-2.jpg
If China had owned a lot of U.S. debt then they would have drove up the price of treasury securities (bonds, etc). That didn't happen. Currently the price of treasuries have been increasing because people are taking their money out of the stock market and investing in treasuries.
Many U.S. investors want China to sell off the U.S. debt because in the long term it will decrease the trade deficit (improve the stock market, boost home prices, increase consumer spending, increase job growth, etc.)
About the dollar:
Japan is thinking about selling off its yen to boost the value of the dollar so Japan can sell more Japanese cars in the U.S.. "Japan sold the yen on the four occasions since 1995 when the currency approached 100 to support exporters including Toyota, the world's second-biggest automaker." ...
Contrary to what most people think, a weak dollar is not bad for America. It helps U.S. automakers and manufacturers. It also reduces the trade deficit which reduces unemployment and the national debt. The dollar is fine. The falling dollar helps the economy.
A weak dollar does not make foreign car makers happy. Each time the Japanese yen increases to the dollar by one yen, then Toyota's profits drop by 35 billion yen
Global economics 101. The country with the weakest currency wins. And the country with the most innovation (the U.S.) keeps alive the countries that only know how to copy ( through the use of a devalued currency) .
The countries with the weakest currencies have the fastest economic growth. Japan purposefully devalued its currency for decades to gain U.S. marketshare in our automotive sector and our electronic sector.
China and India are currently devaluing their currencies. China had over a 10?DP growth rate last year. And Russia's devalued currency is hurting the EU steel mills.
The key to America's future is spending money in research and development and at the same time preventing other countries from artificially devaluing their currencies. Those actions alone will increase job growth, improve the standard of living, reduce the need of social programs, reduce the national debt through tax revenue growth, etc..
In the long term a low dollar is actually good for America (as long as other countries don't artificially peg the dollar). A low dollar decreases the trade deficit, improves the economy, and increases tax revenue to lower the budget deficit. China has been enjoying the benefits of a weak currency for a decade. That is the only reason why China is doing so well. It actually sucks at productivity.
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