Saturday, June 16, 2012
Are we that desperate?
I saw on Fox News yesterday how a legal battle is being waged in order for the U.S. to be paid back by China for loans made prior to World War II. The amount could be staggering because of the price in gold and all of the interest on top of penalties. These loans were made after the Japanese invasion of China in 1937. (Japan was already in Manchuria since 1932) We were helping China fight off Japan in much the same way that we had lend lease aid to England to help fight off Germany. We never really expected full payment in both cases. In the case of China, the government changed to communism in 1947. Attempting to get payment from ANY communist government about prior debts is just about impossible. What makes this a little different is that England received such payment prior to the deal to return Hong Kong back to Chinese sovereignty. We have no such offer to make. We must be very desperate to be thinking in this way. We never received full payments from the Soviet Union, nor from England for all of the stuff that we sent them. Winning the war was more important. Besides, getting this money would be like giving an alcoholic a drink just when he is reaching rock bottom. It may hold off the day of reckoning some and will likely only make it more difficult to wean off. The United States, like Europe, is addicted to spending. Even if we manage to get control, the austerity will be tough before things become better. Getting money from China in this way, right now would supposedly make austerity easier, but more likely it will only allow us to put off the day when we have to face the music. Can you imagine the Obama administration NOT spending more if this happened? What about the election in November? It may be too late to save President Obama, but you just never know. We Americans have elected the people who have put us in this position in the first place. This spending is not a new trend. It has been going on for decades and is only now reaching a real crisis point. We must be getting desperate. I guess that we are not going after England or Russia because they don’t have the money and China does. Besides, we owe China so much; this would go a long way to ‘level the playing field’. We must be really in trouble if we believe that China is going to act like us. It reminds me of the idea of the gambler who is making a last throw to hit it big to get out of debt.