[ExI] Presidential overstep
danust2012 at gmail.com
Thu Mar 7 16:55:23 UTC 2019
> On Mar 7, 2019, at 7:52 AM, <spike at rainier66.com> <spike at rainier66.com> wrote:
> From: extropy-chat <extropy-chat-bounces at lists.extropy.org> On Behalf Of Dan TheBookMan
> >>…China’s government has the authority to order its people to desist lending money to the US at any time. If it does, the US has no practical way to raise the difference.
> >…There’s s saying that might apply here: “If you owe the bank one hundred dollars that's your problem. If you owe the bank one hundred million dollars, that's the bank's problem.”
> Eh, it isn’t so much what the US owes the bank. It’s that the US is dependent on that bank continuing to issue new credit cards at an increasing rate, into the future as far as we can see. The US government has no practical way to significantly increase its revenue and it shows little interest in cutting its expenses.
The thing about the Getty quote (well, it’s attributed to him) is that while the bank here can surely stop lending, there’s a strong incentive not to see the debtor go belly up. In the case of China, if it stops lending to the US government it enters a risky area where probably the only certain thing is it won’t be repaid. (Yes, in the long run, it’s a bad strategy, but history abounds with examples of people and entire nations gambling on the long run being long enough away not to matter, no?)
I was also going to bring in the current president’s dealing with banks. He seems to have followed the Getty quote. ;)
> >>… China is planning to take ownership of a huge swath of the Pacific. The US can’t do anything about it…
> >…You make it sound as if China is churning out these islands all over — …. Do you believe China is a threat or a menace? ;)
> Regards, Dan
> Dan the real threat isn’t even the islands. It’s the threat of cutting off the lending. The US has shown that it cannot live on its income.
See above. But dig a little deeper. China does hold a lot of US public debt, but it’s still only a fraction — less than 6% of the whole debt — according to this:
Now, sure, that can change. But note Japan holds almost as much. And my uncle pointed out that if we were having this conversation in the 1980s, everyone would be worrying about Japan buying up the US and calling all the shots. What happened?
> All this flapping around, the US government at war with itself is distracting from the real threat.
When has this ever not been the case? I tend to start with the view that any ruling class (or any state) is more a collection of factions vying with each. Of course, this can go to the extreme of what’s call elite fragmentation, where the ruling class loses cohesion and the result can be civil war, external control (think colonial powers with regard to their colonies), or secession. (I don’t think external control is really an issue for the US. Nor do I believe elite fragmentation has occurred to any degree that would lead to civil war or secession. I believe it’s all hyperbole at this time.)
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