I'm less worried about borrowing from China then I am borrowing from ourselves.
Intergovernmental debt is a bigger deal and generally ignored. (Hence why Clinton was able to "balance" the deficit, yet still raise the hell out of the deficit.
Essentially, the US will likely get it's act together on what it owes other people... but likely screw over those who invest in social security, medicare etc. It's own people.
Hence why private social security is actually a GOOD idea.
Because I know if i put my money somwhere privately, that the US government can't steal it to spend it on defense or other welfare programs or whatever...
and in this case it really is stealing since they are spending money that is supposed to be used for social security on other things, replacing them with IOUs.
Unless you end up having people put money besides Wall Street, privatization of Social Security becomes a bailout program for Wall Street. If Wall Street again goes bat loco and hedges like idiots and takes down everyone's pensions and retirement savings as a result, there will end up being a mass cryout by the public to save Wall Street.
Fair enough... but if there is.. the end result is that we are exactly where we are anyway. People could always just have the government bail THEM out instead of Wallstreet and give them the benefits they would of got under Social Security.
While the best result is... this is not a problem anymore.
Alternativly we could be like every single other country in the world and privtise social security (and medicare funding etc) and put it in the hands of investors.
Which is actually the method I prefer most... however nobody is suggesting such a thing. Nobody has since Al Gore... who kinda suggested it maybe? I think he just wanted to dump actual cash into a reserve though, which didn't make sense to me.
After the financial meltdown, look at who gets bailed out. If the government bailed out people, they would of gone directly to people and got their mortgages stabilized. But they didn't. The Fed and U.S government decide to "stabilize" banks and give them bailout money and no interest loans, to make sure Wall Street was saved. And then you have Santelli go on CNBC and rant against subsidizing "losers" when the idea of bailing out the people with the loans, and that rant became a rallying cry that birthed the GOP-cored Tea Party (contrast with Ron Paul tea partyers afterwards). Tea Party principle is you have the losers die off, in order to provide a feedback to markets so bad things don't happen.
