China is arguably the largest Communist nation on earth. But instead of the paranoia of the McCarthy era when we were deathly afraid of being taken over by a communist power, we have embraced China wholeheartedly. We want China's cheap labor and cheap products. Furthermore, China represents a huge market for our products.So we've all become Comm Symps - Communist Sympathizers. We have so much in common. Neither China nor the US has signed the Kyoto Treaty. We both believe that Progress is more important than the environment.
There are only a couple of small problems: a trade imbalance resulting from the fact that the US buys more from China than China buys from the US. Furthermore, China has bought up a huge amount of US debt. Where would we high spending Americans be without Chinese central bankers being willing to loan us money? It's only somewhat ironic that the world's leading capitalist nation must go in hock to the world's leading communist nation. After all, the US needs $200 billion a year just to fight the war in Iraq. And we must have tax breaks for the wealthy. Raising taxes to fight a war? Out of the question. We must bring freedom and democracy to the Middle East at no cost to ourselves. That's where the Chinese central bankers come in.
What if some day the Chinese central bankers call in their chips? What if they say to the US, "Pay your debts or go to the debtor's gulag? You do not have the luxury any more of spending $200 billion a year of our money to bring Peace and Democracy to the Middle East." You're going to have to raise interest rates and taxes to pay us what you owe us."
