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A comment on When It Comes to China, Google’s Experience Still Says It All. Parent comment

Re:When It Comes to China, Google’s Experience Still Says It... by dragonwriter on Wednesday August 03, 2016 @06:04PM (#12221917)
> and having the government take on additional interest-bearing debt instead does not seem particularly attractive when the Chinese are the ones who will end up collecting interest on the loan.

But the Chinese aren't the ones that will end up collecting interest on additional US debt; while they are the biggest current foreign holder of US debt, their total holdings are dropping; they not only aren't the biggest purchaser of new US debt, they aren't even a net purchaser of US debt. (And they are only the biggest foreign holder, most US federal debt is owed to...entities within the US; non-federal US entities hold 4 times as much US debt as China does.)

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Re:When It Comes to China, Google’s Experience Still Says It... by trevelyan on Wednesday August 03, 2016 @07:03PM (#12222172)
You're missing the point. The problem isn’t who buys the loans (that is optics). The problem is that you are imposing a long-term tax burden on Americans in order to paper over a structural demand deficit. This is unsustainable and also unfair -- Americans are already paying for the status quo through persistently high unemployment and wage stagnation.

The best solution of course involves China recognizing that persistent trade deficits hurt its trade partners. The problem is that the Chinese political system is its own distributional game, and while there are direct costs for its participants associated with opening up markets and letting foreign businesses compete with domestic ones, there are no costs and only benefits associated with foreign dumping.

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