Thursday, June 18, 2009

Instead Of TARP And Stimulus: What If The U.S. Had Paid Off Its Debt To China?

As a conservative, I am appalled at the way that our government has chosen to waste citizens tax dollars to bail out the car companies and the banks. I was also against the stimulus package passed by Congress in February. I believe that the government should not interfere in the free market. If a company makes bad decisions then that company should have to live with the consequences. Why should our tax dollars be used to help out a company that made bad decisions? If I made a bad decision and found myself in debt, would the government bail me out? I highly doubt it. Nor do I think that the government should. The stimulus money was meant to stimulate the economy and increase the number of jobs in the U.S. Most of the money in the stimulus package went to special interest groups and their projects and the money did not go toward shovel ready jobs. Some states didn’t even know how they were going to use their portion of stimulus dollars. The American people were told that shovel ready jobs were waiting to be completed and that the money was needed to hire workers, but that wasn't true. Are there more projects being completed in your area? I don’t see any big increases, if at all, with regard to shovel ready jobs in the Pittsburgh area.

In searching on the internet I found out on Wikianswers.com that as of April 6, 2008 the United States owes China $492 billion. Then, by coincidence today Stuart Varney from the Fox Business Network stated that China owns $763 billion of U.S. Treasury debt. That means that the United States owes at least that amount of money to China. The U.S. government has spent $787 billion on the Stimulus Bill and about $700 billion was on TARP. What if the U.S. had used the money we spent on both TARP and the Stimulus Bill and paid off our debt to China? Would that have been a good idea? Then the U.S. would not be beholden to China. Would that allow the U.S. to have more opportunities in the trading market? If the United States had paid off its debt to China then the U.S. could have started producing more made in the U.S.A. goods and exporting them. I believe that this could have created new jobs. I think that the U.S. should still trade with China but it seems to me that now the U.S. is mainly buying and importing cheap goods from China. It seems like the United States is not exporting nearly as many products as it was 40 or 50 years ago. Do you think that China would stop trading with the U.S. if we paid our debt to them? Would paying off the debt to China hurt the U.S. economy? I think it would benefit the U.S. if the United States paid off the debt that we owe China.

9 comments:

Kyle R. Cupp said...

"If a company makes bad decisions then that company should have to live with the consequences. Why should our tax dollars be used to help out a company that made bad decisions?"

For starters, it's usually not just "the company" that suffers; innocent people suffer as well.

"In searching on the internet I found out on Wikianswers.com that as of April 6, 2008 the United States owes China $492 billion."

Would our expensive wars have anything to do with that debt?

Teresa said...

Well, I am sure that innocent people do suffer because of the bad decisions of others in companies.
First I would say that both GM and chrysler filed for bankruptcy.That could have happened sooner rather than later, without wasting taxpayers money.
2nd, If we went by the standard that no one should ever suffer or lose their job, then I would think that every time a company was forced to close the government should step in and save the company and every person from losing a job. That would be kind of crazy and not reasistic at all. Shouldn't we let the market decide what jobs are sustainable? The coal miners were put out of business because the market according to the law of supply and demand didn't demand as much coal. Should the government have stepped in to stop the coal mining industry from declining and putting the miners out of work?

Yes, I suspect that the wars are part of the reason for the debt. But, I also suspet the other part of the debt is due to the bailouts.

Kyle R. Cupp said...

To clarify, bailouts are not always (or even often) the answer, but government has a role to play in the market. Laws against fraud, for example. I also support living wage laws and social safety nets. And sometimes it may be prudent for government to bailout a company.

The market itself does not establish a just or humane economy; we need both culture and, yes, government involvement to reasonably attain that.

Left Coast Rebel said...

Teresa - Great points here, these things used to be common sense until recently. Our society has been dumbed down, lied to and fed so much nonsense in the public schools that we could go a lot farther downhill from here. Case in point, Kyle here! Great post!

Kyle R. Cupp said...

Glad I can help, Left Coast Liberal.

Kyle R. Cupp said...

Oops. Left Coach Rebel. Sorry. Man, my public education really has dumbed me down!

Teresa said...

I do believe that Govt. should play a role in the market, but as small a role as possible. I am still not sure that these govt. bailouts were necessary. I agree, that there should definitely be laws against fraud and living wage laws.
Kyle, when referring to living wage laws, Is one aspect of that minimum wage increases? The only question I have regarding living wage laws(minimum wage increases), is that can living wage increases have a negative effect on inflation-or force inflation? The government definitely needed more oversight in the case of Madoff.I think,in the case of the SEC, there was a lapse in their duties to oversee the laws associated with business or in the financial industry. I am not as well informed about social safety nets so I would have to look into examples of social safety nets.

Kyle Cupp said...

“Kyle, when referring to living wage laws, Is one aspect of that minimum wage increases?”

Possibly. I’m of the opinion that people do have a right to a living wage, a wage that allows them to meet their needs and live in relative comfort. I would prefer that as a society we didn’t need to use the law to make sure people’s needs are met; I’d rather see our society governed by a spirit of generosity. Unfortunately, even in our relatively prosperous society, people’s needs are not met, and generosity cannot complete with greed. I’d like to make the point, though, that when I saw people have a right to a living wage (or healthcare, etc.), I do not mean that everyone should just rely on others to meet their needs. If I have a right to a living wage, then I have an obligation to respond to that right and do what I can to attain a living wage.

“The only question I have regarding living wage laws (minimum wage increases), is that can living wage increases have a negative effect on inflation-or force inflation?”

As I understand it, that’s one of the questions debated among proponents and opponents of minimum wage increases. I don’t have a definitive answer for you. Assuming that such a negative effect results, that’s not necessarily a reason not to have minimum wage laws. Economics always involves trade-offs. It generally comes down to people’s priorities.

Teresa said...

Kyle,
Thanks for answering my questions. God Bless!!!