United States of China?

Say it isn’t so.  Before nationalizing a huge chunk of our housing market, the feds sat down at the virtual conference table with a few important stakeholders, including China.  It seems that the Chinese hold roughly a ten percent stake in the Franny twins.  If they decided to stop rolling over their paper — such a thought can not be thought.

So here we are in the bizarrest of situations.  Can the world’s greatest capitalist country pay its debts to the world’s greatest communist country?

I used to wonder whether China would threaten to stop holding all the United States debt it has.  That would have been a catastrophy.  But they aren’t doing that.  They know that this is still a potentially prosperous country from which they can collect more money.  Problem is, the best and brightest capitalists this country has produced can’t be trusted to pay their debts.  No, they got too greedy and tried to keep it all to themselves.

So the feds and the Chinese et al at that virtual conference table came up with a solution. Socialized finance.

The ramifications of this new type of American institution will need more thought to understand.  At this time let’s just say that there are limits to how far you can take deficit financing, even for America.

And McCain/Palin want to cut taxes some more?  If socialism is so good for the rich, how about some for the rest of us.  Socialized medicine anyone?

For a more balanced discussion of this issue, go to Gabriel’s scarcity rent.

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2 Responses to “United States of China?”

  1. Tim Ramsey Says:

    I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

    Tim Ramsey

  2. miklwald Says:

    Thanks for reading.

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