Why the United States might pay China before we pay our own soldiers

Why the United States might pay China before we pay our own soldiers

Summary: If you've ever wondered why I have so little regard for our politicians of both parties, this is one example.

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I've spent the past week or so trying to get my head around this whole "debt ceiling" debate that's raging in Washington. Clearly, it's important, but what does it really mean?

As it turns out, if the politicians screw up, it could be bad. Real bad.

Think of the debt ceiling as America's credit limit. The only difference is that the people we're borrowing money from don't set the limit, Congress does. At it's most simplistic, if we hit the debt ceiling, we can't borrow any more.

This is not necessarily a bad thing, unless, of course, we need to pay for stuff and we don't have enough money to do so. We spend on a lot of things, including our soldiers' salaries, social security checks, and all the other outflows that the U.S. has to make on a constant basis.

We also spend on a lot of stupid things and this, it seems, is the core of the debate. The Republicans think some of what the Obama administration is spending on is stupid. The Democrats think that what the GOP wants to spend on (mostly tax cuts for the super-wealthy) is stupid.

Congress, being one of the checks and balances (and run pretty much by the GOP) wants to put a ceiling on debt. This is both because they're completely against the Obama administration's spending practices and, because, if it all goes horribly wrong and the economy tanks further, they can blame the incumbent President during an election year. Yay, patriotism!

By contrast, there's some debate among Constitutional scholars (and their always lucid research team, the blogosphere) whether or not Congress can legally impose a debt ceiling. Section 4 of the Fourteenth Amendment to the Constitution has this handy little phrase:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

Some people take that to mean that debts are always paid, and therefore, if we have to borrow more (even if it's borrowing to pay debts -- talk about stupid!), we'll do so.

This is, in fact, probably true. For support, let me point you to an article in Esquire called The Debt Debate's Real Doomsday Scenario. It's written by Tom Junod, who does not profess a party affiliation, but from his writing, it seems clear he's not exactly on the GOP's side this week.

In any case, Junod points out that the Treasury will pay our debts. The whole "full faith and credit of the United States" thing is at risk if we don't, and nobody really wants to see America's credit rating downgraded.

What this means, according to Junod's piece, is that -- assuming the debt ceiling isn't raised as President Obama would like -- the U.S. will pay its debts by pulling money from other operational budgets. In effect, we'll stop writing checks to anyone other than our creditors, until we can meet our credit obligations.

I can't tell you if Junod's read is correct. I'm neither a Constitutional scholar nor a banker. But I am something of an expert on national security and here's where I start getting concerned.

China is America's largest creditor. You can see it coming, can't you? Yeah, I know you can. Let's play this out.

If China is America's largest creditor, and we're going to have to pay our creditors before we pay for anything else, then who are we going to pay before we pay our social security recipients, our soldiers, and pay for all of our other operation expenses?

Yep. China.

If you've ever wondered why I have so little regard for our politicians of both parties, this is one example. Their bickering, their constant efforts to put party before country, and the overwhelming influence of lobbying organizations have screwed up our nation's priorities.

Is there a way out of this mess?

I outlined a lot of ideas in How To Save Jobs, but those approaches require substantial changes in how we prioritize our national interests.

So why am I telling ZDNet's tech audience?

The bottom line is this. If our politicians don't solve this bitter dispute, we're likely to be sending money that might otherwise go to you, your employers, your schools, your military, and many other services that you rely on to China.

Call your Congressional representatives. Tell them to stop bickering and resolve this one way or another before we wind up paying China before Americans.

See also:

Topics: Banking, Enterprise Software, Government, Government US, China

About

David Gewirtz, Distinguished Lecturer at CBS Interactive, is an author, U.S. policy advisor, and computer scientist. He is featured in the History Channel special The President's Book of Secrets and is a member of the National Press Club.

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120 comments
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  • RE: Why the United States might pay China before we pay our own soldiers

    We're a doomed, apathetic society that will get what it deserves. Now let me get back to deciding if Google+ is better than Facebook. I need to make this decision before I settle in to watch DVR'd episodes of
    "Houswives of...." and "Dancing With the Stars".
    frizzllefry
    • RE: Why the United States might pay China before we pay our own soldiers

      @frizzllefry Couldn't have put it better myself.
      Naryan
      • RE: Why the United States might pay China before we pay our own soldiers

        @Naryan I agree.
        blueskip
    • When you are able to print world reserve currency

      ... the entire world pays you 24/7 whether they like it or not.
      LBiege
      • RE: Why the United States might pay China before we pay our own soldiers

        @LBiege ......until they see that the emperor has no clothes and he's flooded the world with worthless paper money.
        hutchco
    • S'ils n'ont plus de pain, quâ??ils mangent de la brioche...

      Use Google Translate and see what I mean...
      cosuna
    • RE: Why the United States might pay China before we pay our own soldiers

      If either party had complete unopposed control, there would still be substantial 'unsolvable' problems.

      Both parties don't scale. In a nutshell, that is the problem.
      Brad_Smith
  • RE: Why the United States might pay China before we pay our own soldiers

    this is because the devilcrats are committing treason while taxing and spending our money.
    We need tax breaks for job creators not big $$$ paid to our enemies or domestic bums.
    Linux Geek
    • RE: Why the United States might pay China before we pay our own soldiers

      @Linux Geek Are you trolling? Obama got a crashed economy and a massive debt... Trickle down economics dont work. Ever the former budget director of Ronald Reagan said that the GOP took the short bus to crazy town.
      Tommy S.
      • RE: Why the United States might pay China before we pay our own soldiers

        @Tommy S.
        I represent the American people will as of November 2010: No more taxes, No Obamacare and tax breaks for job creators.
        Linux Geek
      • RE: Why the United States might pay China before we pay our own soldiers

        @Linux Geek The American people LOL. Like anybody should listen to their will? What people want is: Less taxation, more services, more jobs and more everything as long as they dont pay for it.

        This is reality, making ridiculous statements like that wont help anybody. Well, Im sure you guys can keep your head in the sand for a couple more years if that is what you wish.
        Tommy S.
      • RE: Why the United States might pay China before we pay our own soldiers

        @Tommy S.
        I seem to remember that the democrats were in control of congress from the 2006 election. Were they not the one's that said no problems in the housing sector? The president got a crashed economy true and the republican policies helped it crash. "the GOP took the short bus to crazy town" - True then the democrats set up housekeeping there. Remember "you have to pass a bill to find out what's in it"? BUT Obama and his party standing around saying "NOT ME" it's all the other guy's fault is BS. They've made the economy worse. Health care is not going to save money unless you cook the books. If it's great why all the exemptions? The stimulus didn't seem to work. Both parties are to blame and the BOTH the GOP and President Obama are playing the debt for political gain. They all need to stop and the finger pointers on both sides who insist it's all the other guy's fault need to shut up and get to work. We need both TAX and ENTITLEMENT reform.
        Joe Dufflebag
      • RE: Why the United States might pay China before we pay our own soldiers

        @Tommy S. - I guess you forget things were going well for the former President until the Democrats took control of the House and Senate. Then then they got the Presidency and super majority in the House and the Senate.... and all the Democrats want to so is to blame Republicans?? So your saying when the Democrats were running the house and the senate that they did nothing wrong and it was all the presidents fault? Well, now the Democrats have the Presidency and now it's not the Presidents fault but everyone else (republicans)? Seriously?
        beau27
      • All spending originates in the House of Representatives

        look it up. Who controlled the house the last two years of the Bush administration when everything went to hell in a handbasket.
        fr_gough
      • RE: Why the United States might pay China before we pay our own soldiers

        @frgough - Perhaps you should look up the difference between correlation and causation. It might do you some good. The economy was already tanking in 2006, where the housing markets actually began to decline.

        Also, I think you should realize that the debt ceiling was raised 7 times in 8 years under Bush, no questions asked, I might add, and 0 times in 8 years under Clinton.
        hoaxoner
      • RE: Why the United States might pay China before we pay our own soldiers

        @Tommy S.

        WRONG!!!
        The Domocratic party has been in control of one or both houses of Congress for every year since WWII with the exception of the first 6 years of the Clinton administration.

        When the Republican party got control of Congress, with the "contract with America" nine of the ten items passed with Al Gore denying the 10th, which was to have an admendment for a balanced budget. Democrats blew back then too.

        Not only was the deficit eliminated, but the government actually had surplusses recorded! The Clintons, of course, claim they fixed everything, (liars).

        The last 2 years of the Clinton administration, the Democratics controled the Senate, and then both houses during the Bush adminstration. This were the enonomy began to fail, and really tanked as Obama lied to the voters and Democrats were given almost total and trashed the economy.

        Since Congress is the only body which can pass spending bills, we have seen proof positive that the Democratic party has no idea on how economics work, and have consistantly damaged this country each and every time they have the power to do so. Sorry, if you disagree, but the facts speak for themselves.
        linux for me
      • RE: Why the United States might pay China before we pay our own soldiers

        @Linux Geek

        If there are no more taxes, then what point are tax breaks for job creators? Also if there are no more taxes then nothing gets solved at all. You certainly don't represent me.
        Bucky24
      • RE: Why the United States might pay China before we pay our own soldiers

        @Tommy S. One thing the administration should learn from this is: This is what you get when you run for office. The safest, best placed people in this country are the janitors.
        gsa729
      • RE: Why the United States might pay China before we pay our own soldiers

        @Tommy S. ...David Stockman has other interesting things to say about how the federal reserve is actually the culprit behind the current depression. Cheap money leads to poor investment decisions, if interest rates had been higher than .5% since year 2000 after the tech bubble burst, there would have been wiser investment decisions made and a more stable economy. Ron Paul has been saying these things for 40 years, predicted the housing bubble back in 2002, and has always stated the truth of what Bernanke just finished learning....stimulus doesn't work. If cheap money caused the problem, how can it be the solution? here's stockman:

        http://www.lewrockwell.com/orig11/stockman6.1.1.html

        & video of stockman "bernanke's done stick a fork in'em"

        http://www.lewrockwell.com/orig11/stockman6.1.1.html
        hutchco
      • RE: Why the United States might pay China before we pay our own soldiers

        @Tommy S. Linux Geek sounds like one of those Tea Party Geeks that think the rich minority of the country runs the rest of the country. They refuse to acknowledge, as does Congress, that Medicare is actually a creditor, not an "entitlement". We the people paid into Social Security. Congress cannot legally spend that money so they "borrowed" from it; over and over and over again. Now they threaten us with losing Medicare because it's an entitlement and will go broke sometime in the near future. My question is: who is breaking that bank? The answer is Congress with it's spending of Medicare's "borrowed" money that they have yet to pay back. If China is a creditor and creditors get paid first, Social Security and Medicare should be included in those payments. Even, actually ESPECIALLY, before Congressional salaries.

        Everything I've seen regarding the Tea Party is divisive. I always registered "No Party Affiliation" until the Bush/Cheney regime started on it's destructive path with the war in Iraq, PATRIOT Act, Homeland Security (which I consider to be just the American version of the old Berlin Wall), fear mongering and ensuring favored corporations received "no-bid" contracts. Then I registered as a Democrat simply to show that I was anti-Republican, not because I believe the Democratic party either.

        Face it; we are not a communist state, we are not a fascist state, we are a welfare state. When the Democrats are in charge, the poor get welfare and when the Republicans are in charge, the rich get the welfare.

        I, myself, am a Vietnam vet who has reached a point where I am so disgusted with this country's leaders (ALL of them) that I'm actually embarrassed to have fought for them to be where they are today. I am embarrassed to be an American in the face of the world. Thank you, Congress. Nice job. Worthless pieces of cr**.
        xffcapt01