Mark, can you help out here?
Todd, when someone owns a note or a signed obligation, does it not mean the signatory to the note owned by someone else is in debt to that other person?
There is also a sovereignty and national security aspect to this. If foreign countries own certain things in this country, it puts Americans at risk. Think the Chinese and the Panama Canal. You can thank Mr. Peanut for that.
If you're talking about Treasury debt then just say so.
There is also a sovereignty and national security aspect to this. If foreign countries own certain things in this country, it puts Americans at risk.
Why don't you be more specific?
Think the Chinese and the Panama Canal. You can thank Mr. Peanut for that.
Yes, handing over the Canal was stupid. The last time I checked though, the Canal was not in this country.
They hold collateral on the note. As I understand it, this includes the entire mineral estate of the United States and (more recently) water resources. The way control of these is transferred from Americans to foreigners is via environmental regulations empowered by (IMO unconstitutional) treaties held at the UN.
Given that interest rates on bonds don't pay very much, there has to be a way to sweeten the deal given inflationary pressures on the principal, else the lenders aren't very enthusiastic at bond auctions and interest rates would otherwise rise rather sharply. Needless to say, once regulatory power has been consolidated in administrative government, a selective permitting and enforcement process is a very easy way to deliver a politically opaque return.
I can confirm that there are virtually no American hard rock mining operations left in the Western US. Those permits are held by European and Asian concerns (no, I don't have a lot of hard data on this, but I know some folks in the mining business who might; I've been avoiding doing that research because I've been busy elsewhere). We have effectively sold our assets to secure borrowing to fund a military machine that defends the creditors' interests abroad, something against which toddsterpatriot has inurred his comprehension, the siren song of comparative advantage being what it is.
Unfortunately for the economists, there's no such thing as an even playing field; the intangibles of relative risk skew any transaction, whether environmental (exotic species in imported goods), military (obligations to defend extended supply lines when domestic production is subject to regulatory constraint), or political (illegal aliens). It is the role of government to see that those risks are justly apportioned. Unfortunately, it is all too easy for a craven welfare state to socialize the risks while privatizing the benefits instead.