Question: How widely held is Fannie Mae and Freddie Mac paper?
Answer: Very.
Via Monday’s NYT:
"For more than a decade, Fannie Mae and Freddie Mac, the housing giants that make the American mortgage market run, have attracted overseas investors with a simple pitch: the securities they issue are just as good as the United States government’s, and they usually pay better.
The marketing plan worked. About one-fifth of securities issued by Fannie, Freddie and a handful of much smaller quasi-governmental agencies, some $1.5 trillion worth, were held by foreign investors at the end of March. One out of 10 American mortgages is, in effect, in the hands of institutions and governments outside the United States.
Now that the two companies are at risk, how their rescue is handled will ultimately test the world’s faith in American markets. It could also influence the level of interest rates and weigh on the strength of the dollar for years to come, analysts say.
“No less than the international perception of the credit quality of the U.S. government is at stake,” said Richard Hofmann, an analyst with CreditSights, an independent research house with offices in London and New York."
So these jackass SIVs that were stretching for higher yield bought GSE paper that went bad — Are you trying to tell me we are guaranteeing the private sector investments of foreign governments also? Do the words "fuck ’em" mean anything?
When the hell is this going to end? The US taxpayer simply cannot be the guarantor of last resort for every bad bet made by anyone anywhere. Any nation that does that turns their children into indentured servants for generations.
Discuss . . .
>
Source:
Trouble at Fannie and Freddie Stirs Concern Abroad
HEATHER TIMMONS
NYT, July 21, 2008
http://www.nytimes.com/2008/07/21/business/21bank.html
Too Chinese (and Russian) to fail?
Brad Setser
Council on Foreign Relations, July 12th, 2008
http://blogs.cfr.org/setser/2008/07/12/too-chinese-and-russian-to-fail/
Related:
Freddie Mac May Slow Purchases of Mortgages to Preserve Capital
Dawn Kopecki and Jody Shenn
Bloomberg, July 21 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7F3y2TbdVEs&
Paulson Says Fannie-Freddie Plan Critical to Confidence in U.S.
John Brinsley
Bloomberg, July 21 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoXgLo6UXOvI&
~~~
Do the words “fuck ’em” mean anything?
I completely agree with your sentiment.
It seems that we keep relying on the government more and more. I hope we get through this and learn a few lessons about bubbles, greed and politics.
Yep, just so.
I’m tapped out. Let Cramer and Kudlow write the check.
If you are a low-tax conservative you don’t want to piss off the people who lend America all that money to keep running despite the low taxes. Low-tax conservatives have put us in a very weak position.
Go Barry!
Give Paulson a squirt gun, NOT a bazooka!
“An Indenture is a legal contract between two parties”
Which implies some sort of consent so technically you can’t be born into indentured servitude. They’ll just be born into a bad situation. And you think teenagers hate their parents now…
Not if those same children turn around and renege on all the obligations.
Let’s remember, all of the trillions owed today are perceived to have benefited in large part the Baby Boomers. The following generations will have to pay the bill for their extravagant living, while most likely living in squalor relative to the wonderful lifestyles of those who ran up the tab.
The children will walk away. Who knows, our States may not be so United in a few dacades… and then, the terorrists really will have won, as that is their endgame… only it will be a victory by forfeit.
Protecting Bill Gross is the highest mission of a great democracy, even if it means missing a chance to f**k China.
Do we compare the current economic malaise and imploding stock market to:
1) 2000-03 Tech Bubble Crash
2) 1970-79 Oil Embargo/Carter Stagflation
3) 1930-39 Great Depression or
4) 1930-39 Wiemar Republic hyperinflation and rise of fascism.
I’m afraid we’re about to slip from 2 to 4 being a better comparison for the course of this economy and our government’s handling of it.
Wow BR. Agreed
I agree with Solodoc completely. If we give Paulson a bazooka, how do we know he isn’t going to turn it on us?
They should just take Fannie and Freddie, bury them in the desert in Nevada (or better yet, in Kazakhstan) and just blow them up like a nuclear test. We’d all be better off in the long run.
Screw the FNM/FRE bondholders. If they wanted safety, they should have bought treasuries. The extra yield was the excess risk. I guess they may have mispriced the risk. Ooops!
Not too long ago, The Onion had a piece claiming the American investor was demanding a new bubble to invest in. Unfortunately, it was too close to being a real story.
My blood pressure goes up just thinking about what we’ve created. It’s criminal.
The U.S. has a rich history of pulling economic “fuck yous”. I think this would be a great way to keep ‘tradition’ alive by offering them 10cents on the dollar or nothing – and following through!
hey, let’s not get all high and mighty here.
let’s face it, our standard of living and our economy for the last 10-15 years would not have existed without these purchases.
none of them put guns to our head, and forced us to take out HELOCs to go on a QVC shopping spree.
the value of our currency would be close to toilet paper now, if they stopped buying our paper.
the US taxpayer has been on a free ride for years, and now it’s time to pay the bill. the very least we can do is to show some common courtesy and at least show an ATTEMPT to pay the money back.
the money that was lost in this whole debacle never belonged to us in the first place. where i’m from, if you make an agreement with someone, you honor it. i don’t care if the guarantee was implicit, or explicit. we borrowed their money, promised to pay it back, and said the taxpayer would insure the payments.
that’s the agreement.
so just bend over and take it.
“If you are a low-tax conservative you don’t want to piss off the people who lend America all that money to keep running despite the low taxes.”
Who knows. Maybe a bloodbath will actually force the GOP tax cut and spenders to realize the value of a balanced budget. Just maybe? Naaaaah.
The gov’t is quick to bailout its rich and powerful friends. But, stresses moral hazard when it comes to the average joe. I think there will be a reckoning.
…The marketing plan worked.
Good Bye “AAA” rating USA (at least in the eyes of foriegn investors if you back out of your sohistry marketing machine that promised FRE & FNM as good as government of USA!
How pathetic it would be of these self-righteous, self-serving rating agencies to continue to give AAA rating to the good Old USA and be first to scream fire/downgrades at some third-world country at first sign of trouble in growth or some geo-political issue!
BAIL-ME OUT OF MY OWN WORDS and PROMISES!
World is full of two-faced people I guess. Good and Evil; batman and joker — two sides of the same coin…
The US taxpayer simply cannot be the guarantor of last resort for every bad bet made by anyone anywhere. Any nation that does that turns their children into indentured servants for generations.
one more thing: it wasn’t foreigners that turned our kids into indentured servants. that was US.
WE spent our kids into the poor house by spending their future earning streams through this colossal debt binge.
Foreigners simply provided us the means to do so; but make no mistake, this was OUR doing.
Blaming the chinese and japanese for our stupidity is disingenuous at best, and appalling at it’s worst.
am i the only one who thinks we are getting so excited about nothing.
there is something called as inflation.
its as though the us government is going to pay those people for its deficit in real goods….come on it will simply print more dollars and hand it to them.
if they dont support the dollar their export oriented economies will die….if they do they are simply giving goods for free…
its a win win for america…
“its a win win for america…”
And a lose-lose for Americans!
HCF
Hey M3,
I didn’t take any HELOCS nor I ever shopped QVC so I ain’t bending over and taking it from anyone.
The the lenders are as responsible as the borrowers. There is such a thing as due diligence and it seems like no one was being diligent except those of us that didn’t buy into it. Greed has a price. Time to pay.
I tend to agree with m3…we as a nation borrowed the money and we should pay it back. The ones getting screwed here are the savers who didn’t partake in the big party and will have to pay for the tab anyway. I remember a few years ago walking into my local bank branch and them offering me a heloc just for stopping by. I turned it down of course, saying why borrow money I don’t need? This is going to be like going to dinner and splitting the tab in half when the other guy ate the most expensive thing on the menu. Savers like me are getting screwed. I’m going to make myself whole and more though, by shorting Nasdaq into a smoldering crater. It is the culmination of my life’s work in economic analysis.
Barry for president?
Do the words “fuck ’em” mean anything?
Sure, as do the words “buyers strike” and “unpredictable geopolitical ramifications.” I share the sentiment, but while we wait for the undeniable long-term benefits of eliminating moral hazard to kick in, we will become a nation of renters, and may just see Treasury yields rise anyway. And given the haircut China and Russia will take, we should expect retailation well beyond the scope of a typical bond market participant. Rock, meet hard place.
Barry:
“Exorbitant privilege”? Never did any Americans any good anyhow. Who needs it?
Discuss.
Because, that’s really what you’re saying. Leave the foreigners holding the bag, and future generations of Americans will have to borrow in Euros.
Yeah! I am so excited to be a 25 year-old kid whose parents created this mess. Indentured servitude, here I come!
“I pledge allegiance to the flag of the United States of Debt, and to the Republic for which it stands…”
iz-
they did do their due diligence, but it was a fraud. (e.g., AAA ratings, FRE & FNM saying with a wink and a smile that they had gov’t backing, while the prospectuses said otherwise, etc.)
FWIW, i have little to no debt either, nor did i go on a QVC consumption binge. but as an american, and supporter of my country & gov’t, i have to take the good with the bad.
neither you, I, or barry can selectively choose which parts of the gov’t’s obligations we can pay for or not. you were part of some great years in this nation’s history, so you’ll have to be part of the worst too.
you can’t cherry pick your obligations & responsibilities. that’s how we got into this mess in the first place: a crass disregard for one’s obligations to other people, only on a huge, massive scale.
Steve-
i agree with you 100%.
Nationalize fnma, fhlmc, helath care and oil too while they’re at it. The great experminents failed. I dream of a world where a person or corporate entity must supply something inventive and useful to be of value not hold there consumers as hostages.
I was going to suggest we sell of the gold in Ft Knox, and close out some of our debt, until I googled to get a guess at how much we may/may not have (somewhere south of $150B at $1000/oz). A drop in the bucket.
So what else can Uncle Sam liquidate, and how much might we get for it? The White House? The Senate? The House of Representatives? (the buildings, the occupants have already been purchased)
Perhaps a lien on a certain ranch in Crawford TX, and a resort property in Jackson Hole, WY?
Maybe we should auction off the national parks?
Hi Barry,
I’ve enjoyed your commentary over the years and agree with most of your condemnations of those decision makers that got us into this mess, but, really, what can we do about it? I’m fed up. I want to DO something to make things better.
How can we start a movement?
Best regards,
Eric
This is basic. Whenever you stretch for yield, you are assuming more risk. Every bond manager in the world understands this all too well. The buyers stretched and got burnt, end of story. The US guarantee should be limited to no more than 50 cents to the dollar.
Pssst Eric.
http://financialpetition.org/
Sign up. Send it on.
Want to make a difference?
See the URL http://financialpetition.org
Spread it around.
The PDF linked off there is, as I Write this, in the middle of being faxed to all 535 Congressfolk.
It should be done by tomorrow.
I agree with Barry – “fuck ’em”. The prospectus CLEARLY states they’re not US government guaranteed. If Fannie and Freddie execs claimed otherwise when soliciting, lock ’em up for fraud.
WE CANNOT AFFORD TO TAKE THE BACKSTOP ON THIS.
“… the us government is going to pay those people for its deficit in real goods….come on it will simply print more dollars and hand it to them.
if they don’t support the dollar their export oriented economies will die….if they do they are simply giving goods for free…
its a win win for America…”
It sounds to me like those old Milton Freedman’s speeches.
Yeah, goods for paper ! But you forget the cost to produce that paper, and it’s called inflation or tax the poor which is the same. Be ready my friend to earn and live with less.
quote of the day,
“Any nation that does that turns their children into indentured servants for generations.”
vs.
“I’m going to make myself whole and more though, by shorting Nasdaq into a smoldering crater. It is the culmination of my life’s work in economic analysis.”
Tough choice, I’m going with number two because it made me much less depressed. I can’t believe what we’ve done to this country. It really has been twenty years of equity stripping both economically and politically.
And, call me crazy, but between the systematic assault on civil liberties and the current economic situation. I don’t think the Wiemar comparisons are all that crazy. Not that it’s remotely likely, just that for the first time in my life a slide into fascism suddenly seems possible.
We should wipe out FNM/FRE shareholders and give the bondholders a haircut (if even modest).
Better to do any of the above as a controlled default — see how our foreign debt holders react — than to push off the day of reckoning to a full blown buyer’s strike on US Gov debt.
Isn’t it a bit rich to be crying wolf now when you (USA) and other rich nations have been holding developing nations in “indentured servitude” for the last half a century or so through “structural adjustment” of their economies so all those loans you made them through IMF, WB etc. Keep getting repaid!? There was little mercy for such countries during the Millenium campaign… why should rich nations be treated to different rules??
Question: When you say ‘jackass SIVs’ do you mean SWFs? Though I suppose SWFs could be messed up in SIVs.
It’s not wise for an addict to tell their pusher to take a flying leap.
It’s better to get onto a programme and gradually reduce your intake.
Your pusher has to be told to that your new supplier is the chemist (fed/govt) and that you are on a multistep recovery programme.
If you tell the pusher to take a flying leap he may call all your credit all at once and send you into serious withdrawal.
This will make your life much harder.
Unfortunately society is like a large family and everyone has to pay for the actions of errant brother and sisters. They are your siblings and the whole family has to pay reparations for their crimes. Don’t get me wrong here they belong in Jail. But society has to pay for them here too.
“Are you trying to tell me we are guaranteeing the private sector investments of foreign governments also? Do the words “fuck ’em” mean anything?”
It would mean everything…if we weren’t dependent on them to finance our lifestyle. Who is buying our Treasuries, so the politicians here do not have to tell the American People that there are tough choices to make?
China et al.
We will be able to tell them to take a flying fuck on a rolling donut the day we relearn how to save and take back our society toward less glitz-blitz-get-rich-bitch and more fairness and common sense.
Until then, we owe mucho mucho dinero! Therefore, we bend over.
It’s that simple.
Ticker Forum has an (IMHO) quite excellent petition to read and sign regarding these taxpayer bailouts of (criminal) lenders, (foolish) home”buyers” and (naive) foreign buyers of Fannie and Freddie debt.
Please go to http://tickerforum.org/cgi-ticker/akcs-www?post=53222 to view the petition and, hopefully, sign.
Once signed, it will be forwarded to the appropriate politicians.
We need to act now. Before they vote us into bailout oblivion.
This entire debacle is closely watched by world financials, and the way our leaders handle this is going to decide our position in the global financial arena.
All those Governments that have billions invested in “Quasi-Governmental Securities” have their end-game planned.
They just cannot keep taking hits and pretend everything is alright.
And any moves that they make will most definitely not be helpful for us.
It could be worse…you could be Bill Miller.
Damn straight, Barry.
“And, call me crazy, but between the systematic assault on civil liberties…”
Excellent point Anonymouse! And no, you are definetely not crazy. In reality, it is much worse than the majority of people think.
How bad? Anyone can now be detained manu militari and that’s just too bad if it happens to you.
snippets [emphasis mine]
“The Bush administration has been a waging a fierce battle for the power to lock people up indefinitely simply on the president’s say-so. It scored a disturbing victory last week when a federal appeals court ruled that it could continue to detain Ali al-Marri, who has been held for more than five years as an enemy combatant. The decision gives the president sweeping power to deprive anyone — citizens as well as non-citizens — of their freedom.”
“The implications are breathtaking. The designation “enemy combatant,” which should apply only to people captured on a battlefield, can now be applied to people detained inside the United States. Even though Mr. Marri is not an American citizen, the court’s reasoning appears to apply equally to citizens.
“Our colleagues hold that the president can order the military to seize from his home and indefinitely detain anyone in this country — including an American citizen — even though he has never affiliated with an enemy nation, fought alongside any nation’s armed forces, or borne arms against the United States anywhere in the world,” wrote Judge Diana Gribbon Motz.
Equally troubling, the ruling supports President Bush’s ludicrous argument that when Congress authorized the use of force against those responsible for the Sept. 11 attacks, it gave the president essentially unlimited powers. If a president ever wants to round up Americans on vague charges and detain them indefinitely, this ruling gives him a dangerous green light.”
The most remarkable aspect of this whole story is without a doubt, the very muted diffusion it got in the media.
But hey! We ain’t got no time for that stuff don’t we? The economy is going bad, so we want to know what’s in our wallets.
I’m tired of baliing out Wallstreet. Greed has exploited the Americn people. Greed of corporate whoremongers. If congress votes to back up Fred n Fran we need to vote all incumbents out. I’m sick and tired of globalization and global economy and free trade agreements that export US jobs so we can become a “service” economy. Welcome to serfdom and slavery!
I’ve already written my congressional leaders and said I disagree with a bailout and I encourage each of you to do the same.
Signing a petition is good, but back it up with an email or fax to congress.
You can have all the financial regimes and bluster you want…what it boils down to is how much longer do the Chinese want to work in factories for $2000 a year to build us flat screen TVs and sew our clothes? My bet is not much longer. C’mon get real.
Francois,
all kidding aside, you’re painting too rosy a picture of what has been transgressed over the last, intervening, interlude..
To respond to Barry’s last question:
When the hell is this going to end?
My answers:
When the DJIA PE = its yield.
When the DJIA = the price of gold.
Roughly the same place as various times in the 70’s but for different reasons. It all rhymes.
Ok! I signed the petition.
http://financialpetition.org
What else can I do? I am frustrated! I’ve just spewed some rants on my blog, but want to do more. I’ve been on the sidelines armchair quarterbacking for too long. People should be outraged.
dont worry barry, you americans still have an asset no one else has: a huge pile of nukes. I’m afraid your country will find any excuse to use them before becoming servants to anyone. Declining empires have always acted dreadfully.
Eric,
You should also check out http://fedupusa.org
There is a protest against the bailouts in Washington DC on July 31st. It’s NOT a conservative or liberal or republican or democratic organization. It’s just a group of fed up citizens like you. Go to the website to get all the info and come to DC on July 31st.
Also, don’t forget to contact your congresspersons and senators regularly and “give ’em hell” until this nonsense stops.
Barry, what are you getting so excited about? I would’ve thought that you at the very least know that there is no such thing as a free lunch. I agree that the US taxpayer and many people on the street were not involved in the creating the current mayhem that is destroying every last bit of productivity and income generating assets that America’s got left but c’mon – living on cheap money was never going to work.
And you know it is not only the avg. person in the street that lived on cheap money it was, first and foremost, wall street that lived, ate, invested and played golf on cheap money. Meanwhile CNBC is still laughing at Jim Rodgers when he advises investing in agriculture and no one in the media will tell you to into gold which has risen 25% this year alone. They want to keep you in paper because that is what they can control and manipulate! Enslavement by debt! As someone previously stated the DJIA = gold (5000pts=$5000/oz) is the turning point – turning point to real bad times cuz from that point on it will only go down more until it reaches zip, nada, zero!
As long as people do not shut off the freakin’ TV and start reading up on history and stop laughing at people talking about a police state, staged terror and a violent takeover of this country and its people by the banking establishment (of Europe not of the US) not one of the people that are getting screwed by this will ever realize what is happening to them and WHY! Had anyone done this earlier none of this would be happening – but Britney and Bono are just more interesting than understanding the concept of inflation, twin deficits, regulation, etc.! At least the avg. person is now more open to listening to people who know what is really going on while the investment class still has their head up their asses or – they have left the country. I know many people who have left already because they know what is coming. The problem is the avg. person cannot afford this. That doesn’t change the fact that this is a home grown problem, simply the result of empire building and that empire is coming to an end – the outright bankruptcy of the United States. This is what foreigners see and understand. Believe me they don’t have the illusion of getting their money back we all know it’s gone. They just want to get out without losing too much!
@francois & @mark e hoffer: ‘too rosy’ is underestimated! all i’m gonna say is continuity of government! and where is your military when you need it? take your pick: iraq, iran, afghanistan etc… But fortunately you got thousands of foreign troops inside the US!
“Are you trying to tell me we are guaranteeing the private sector investments of foreign governments also?”
No. In a global financial market there is no need to distinguish between foreign and national investors. If you favour a hair cut for investors, that’s fine. But “fuck ’em” just because people in other countries also invested money in a corporation located in the US, sounds somewhat xenophobic.
I think your question just misses the point. If you believe in global trade, it is utterly wrong to ask, who invested in a public company. If it fails, it is either “screw them all” or “bail them out”. But “screw them, because they are foreigners” is a horrible sign. Who wants to buy bonds or stocks in a country that will not treat everybody the same way?
Just imagine China would say “Thanks for the money, but now your fucked” for US overseas investments? Or do think Venezuela made a smart move in nationalising the oil industry?
So it is wrong to save F&F, because of foreign investors. But it is equally wrong to let them fail, because of foreign investors. This discussion doesn’t help to clean up the mess.
“Do the words “fuck ’em” mean anything?”
If that´s the US reply to this mess you should prepare for a “fuck you too” in return.
> Any nation that does that turns their
> children into indentured servants for
> generations.
It is not like you have the choice … show me the money!
> Do the words “fuck ’em” mean anything?
Please show more respectful to your new lords
:-)
No seriously, This is a real mess and it will have lasting consequences. If I look at the big picture I see that this crisis might be the inflection point where the US loses the world leadership held since WWII.
Many comments ask what we can do about our current situation and appear resigned. Capitalism seems made for constant boom-and-bust cycles, so when times are good, no one complains, and when times are bad, no one also complains because they expect the next bubble to be around the corner. To borrow from Churchill, perhaps consistently steady growth for everyone isn’t as desirable as the inconsistent opportunity for unequal wealth. Thus, the recurring hangover America experiences every ten years seems vaguely familiar but not bad enough to want to actually do something about it.
some analysis about SWFs in FNM a& FRE :
http://lacrisepourlesnuls.blogspot.com/2008/07/la-chine-investi-10-de-son-pib-dans.html
Barry,
I’m sure that you realize that your ‘fuck em’ comment would lead to a run on the dollar. The real loser in this mess will be the $US and the loss of purchasing power.
The run on the dollar is inevitable. It may start as early as next week. I stand by my prediction that gold/silver will be among the best performing assets the second half of this year.
Look to buy the euro or yen to stay afloat while the ship sinks.
We’re living in scary times, yet the majority of the sheeple have no clue that a financial huricane may be unleashed.
While I feel your pain, the situation is simple:
US lived out of it’s means, as a nation, as a government and as individual consumers.
US can of course try and get a haircut on their loans to foreign creditors (aka fuck’em).
However, don’t be surprised if they institute a cut on your AAA rating, on your currency and on your treasuries through a firesale (aka fuck you too).
We’re all in this, regardless of who started it.
It’d be nice, if the idiots who kept on spending when they were already knee deep in debt, would end up paying.
Unfortunately, that means the the average US consumer and about all the hedge funds and commercial banks.
Hi Barry,
we fuck the Chinese and they say f..k our currency?
Katie,
No doubt that most of our current Economy is denominated in Federal Reserve Notes, though, you’ll see, here:
http://www.banknotes.com/us.htm
this is, just, another interlude in our Nation’s history of circulating media.
the problem is that the denominator, now, is fictitious..
Loan Fan & Fred money – JUST DON’T give it to them!
Why bail them out? That’s all we’re saying. Let a Chinese National bank buy them under.
We don’t have to take a lose lose. They bought risky assets. WE still hold the cards.
No bailouts necessary. Sign the petition. Never capitulate to slavery. It’s not The American Way. Playing chicken is, suckers.
What am I missing?
It is emotionally satisfying to say “oh well we won’t pay” but really is there a choice? Force a haircut on the two largest purchasers of US government debt and they will buy less US government debt. If the Chinese and Japanese don’t buy US government debt (or what they view as the equivalent) then what?
– The US dollar tanks – is there anyone who can argue it will not? If it tanks much more it will likely lose it’s tenuous hold as a reserve currency – which leads it to tank still further.
– Interest rates jump. Partly to try and protect the dollar and partly because without higher rates no-one lends to credit risks. Is there anyone who would argue credit risks usually pay less interest?
– Inflation jumps as the dollar drops. Is there anyone who would argue differently? Won’t oil and manufactured goods and all those other goods that are now made in china and allowed the appearance of low inflation for several years now jump in cost as the dollar tanks?
– China and Japan will make and sell less stuff to trade for US dollars. Which is a downside for their economy no doubt but I don’t see how the US economy won’t do much worse with a higher interest rate, high inflation, and a plumeting dollar.
Yes paying back the Bushpublican debts (a wholly owned subsiduary of the very rich but marketed well as other things) will take years and yes it will impact US living standards for years. But years is always going to sound better than immediate finacial disaster.
Fellow commentors,
You collectively use more cliches than a bad sitcom.
Just something I noticed.
Sara
Anttik:
“It’d be nice, if the idiots who kept on spending when they were already knee deep in debt, would end up paying.”
Yes, the government should stop borrowing in order to fund spending. Fiscal soundness is strength. Give them money and they can have wars and spy on their own citizens. Oh, you meant homeowners.
Sus Ano:
“If the Chinese and Japanese don’t buy US government debt (or what they view as the equivalent) then what?”
The government will have a harder time paying the salaries of our real master, entitlements. Cuts anyone? No way, tax the “rich”, aka producers. After all, those folks making iPhones sure can afford to pay for the pot smoker’s section 8 housing.
DJ:
“Low-tax conservatives have put us in a very weak position.”
No, big government spending has. Pay attention to tax receipts and expenditures over the last 8 or so years. Taxes were cut and revenues hit record levels. Taxpayer’s income did not grow as fast as the feds (percentage wise). However, spending rose at a faster rate, and is likely to go up, as naive people demand that DC “do something”. You got it, they’ll spend your money. Actually, if your like most voters, you’ll vote DC to spend the money of someone else. Nice. Fucking looters!
People need to stop voting themselves into the national treasury. Stop voting to loot.
It is that simple.