Why does the United States have to keep up trade with China?
So we can't make China mad, because our money that we spend comes from the bank of china credit card. How are they helping us pay off our debt? Also, the china military is getting to become very powerful, so it seems like an economic necessity to keep trading with them. There is a mutually assured dependency, meaning they need us to buy their goods to be wealthy, and we know they will not bomb their biggest customer. i need details to back this point up. there is also the humanitarian aspect. to be able to help improve their human rights violations, we need to have a good connection with them. how have we already helped them improve? what are the positive benefits to the united states economy?
Economics - 4 Answers
Random Answers, Critics, Comments, Opinions :
1 :
The way they help us pay for our debt is that the Chinese government buys a large number of US Treasury. When the government doesn't have enough money to pay for the budget it has three choices. 1. Raise taxes, which are unpopular with people, especially in an election year. 2. Print more money, but the congress doesn't have the power too. The Federal Reserve is actually in charge of that and they don't print more money to help pay for a budget deficit because it would lead to hyperinflation They are also independent from congress . 3. Borrow from the public by issuing bonds. They issue bonds by the US Treasury. Anybody can buy them, for example US citizens, companies, the Federal Reserve, or foreign government like China. When they purchase our bonds they are helping us finance our deficit. They give us money and we give them IOUs. But in recent months the Chinese government has started to purchase other government bonds in order to diversify there holdings, decreasing the number of US Treasury bonds they are buying.
2 :
The US keeps trading with the Chinese because we are hooked on CHEAP imported items. Unfortunately our greed and consumerism made this situation happen! If we had been willing to pay for items that allowed for our own to survive, we would be a stronger nation.
3 :
There was a government decision, made in the 60's i believe, to engage China economically because that would facilitate their move to limited capitalism, and would entwine their economic interests with ours. The alternate course would have been to eventually go to war with them.
4 :
U.S.A doesn't have any choice
