If $1.1 trillion owned by Americans to China is no big deal, as MSNBC weekend host Chris Hayes would have you believe, at what point does it become one -- five trillion? Ten? Ever?
Hayes, filling in as guest host on "The Rachel Maddow Show" Feb. 6, was criticizing GOP Senate candidate Pete Hoekstra's "Debbie Spend It Now" ad against incumbent Democrat Senator Debbie Stabenow. (video after page break)
Hoekstra's ad, Hayes predictably inveighed, was racist as all get out and "makes some substantive claims, which are every bit as offensive in their untruthfulness." Hayes elaborated --
The core of the ad's argument is that US deficits redistribute power from America to China. And the mechanism by which it does that is that China purchases American Treasury bonds, which are the means we use to fund American deficits. When we have a gap between our tax revenue and our spending, we have to make that up with debt. The instrument of that debt is a US Treasury bond and China, scary China, is buying up all that debt.
That notion -- take away the offensive way it's couched in Hoekstra's ad -- that scary China-owns-America notion -- is almost a consensus idea in American politics. (Headline shown of New York Times story, "How China Can Defeat America"). It is absolutely everywhere. It has also become a prominent theme in many, many political ads. This is an ad put out last year by the vague, front-groupish conservative not-for-profit group Citizens Against Government Waste. It's set in Bejing in 2030. Be very afraid. ("Chinese Professor" video shown)
More along these lines from Hayes --
So that notion of a scary China has become an accepted trope in American politics. The problem is that it's based on a fundamental misunderstanding of just who owns American debt. Based on all of this, what percentage of American debt would you say China owns? I'll do my best Ron Popeil here. Is it 50 percent? Sixty percent? Seventy, eighty?! Could it be that China in fact owns every last piece of our debt? To the pie chart. The answer is roughly 8 percent. It's not nothing. China is the foreign country that owns the most American debt, but it's still 8 percent. In fact, China is just barely ahead of Japan, which owns 6.9 percent of our debt ($1 trillion) and who used to stand in as the scary Asian nation challenging American supremacy back when I was a teenager.
Japan no longer filling the role of "scary Asian nation" thanks to 20 years of Obamesque "stimulus" spending that resulted in not one but two decades of lost growth. But I disgress. Back to Hayes --
The UK owns the next biggest chunk. The majority of American debt is owned by -- drum roll please -- Americans, partly in the form of the Social Security trust fund. So it is just not the case that America is in hock to China.
Uh, didn't you just say that America is in hock to China? Allow me to refresh your memory -- we owe them $1.1 trillion. You said so yourself, all of 30 seconds ago. Remember?
Let me see if I have this straight. Americans aren't indebted to China, though by Hayes' own admission we're on the hook for a trillion and change -- in other words, a third again more than President Obama's amazingly unstimulative stimulus back in 2009 -- since this represents a mere 8 percent of total US debt. (Insert shrug here).
More significantly, Hayes understates US government debt to China. Depending on how it is measured, the tally could be closer to $1.6 trillion, according to the Congressional Research Service report, "China's Holdings of U.S. Securities: Implications for the U.S. Future," from September 2011. (A graph from the report is shown below).
Not only that, China's share of our debt has soared from under $200 billion in 2002 to more than $1 trillion in less than a decade, according to the CRS report. Whether the amount owed is $1.1 trillion or $1.6 trillion, this is still a staggering increase, and Hayes goes nowhere near mention of it.
Hoekstra's ad against Stabenow, Hayes asserts, made "substantive claims" that were as offensive as the ad itself in their "untruthfulness." What were they? Here's the script from the ad --
Thank you, Michigan Senator Debbie Spend It Now. Debbie spends so much American money, you borrow more and more from us. Your economy get very weak, ours get very good. We take your jobs. Thank you, Debbie Spend It Now.
Not surprisingly, Hayes also didn't address any of these claims or their alleged "untruthfulness," sparing himself this exercise in futility.
At risk of stating the obvious to Hayes, the United States and China enjoy what can charitably be described as an adversarial relationship. China remains an authoritative communist regime, not North Korea but hardly Hong Kong, while the United States is still capitalist despite Obama and his media enablers pushing us in the opposite direction.
A year ago Hayes' MSNBC colleague Maddow mocked conservatives' warnings of Islamist infiltration of our government by invoking "The Manchurian Candidate" -- a movie about communist infiltration of our government. (And yes, the irony was lost on Maddow).
Possible title for a movie about Hayes' views on US debt -- The Manchurian Accountant.