Rising Debt, Rising China

Reince Priebus

11/18/2011 9:56:00 AM - Reince Priebus

Among President Obama’s many broken promises, none is as obvious as his failure to slow the growth of the nation’s debt. Instead of cutting annual deficits in half, as promised, he racked up record annual deficits and rapidly accelerated our accumulation of debt, which recently surpassed an unthinkable $15 trillion.

In political discussion, the debt issue is often couched in terms of domestic policy, but its effects extend well beyond our borders. In their new book, Bowing to Beijing, Washington Times editorial page editor Brett M. Decker and former Senate staffer William C. Triplett II, offer a sobering account of how massive debt complicates our foreign policy with China and in turn, with the rest of the world.

Our government’s excessive spending is financed largely by foreign loans—the largest share of which are Chinese. In fact, China holds over $1 trillion in U.S. debt. As Decker and Triplett argue, that amounts to a self-imposed threat to our security and prosperity.

“America is not getting beaten by any other power,” they write. “We are beating ourselves through deficit spending to fund wasteful big government.” Relying on China to keep America running diminishes our influence with the world’s most populous nation at a time when its global influence grows daily.

In their analysis, the geopolitical reality is as straightforward as it is startling: “As America has become the largest debtor nation in world history…China’s economy has grown more than 10 percent per year.”

That disparity is unsustainable. As the United States chains itself down with greater debt, China is building relationships across the globe to bolster its trade, its access to natural resources, and its energy consumption. In far too many cases, this means lost opportunities for America and our businesses. Our ability to challenge Chinese growth is limited by our dependence on their loans.

Last year, President Obama noted, “In no time in human history has a nation of diminished economic vitality maintained its military and political primacy.” He’s right. But while the president admits that America's place in the world will be degraded if government doesn't change course, he continues on his ruinous spending binge that could fuel our decline.

Decker and Triplett methodically outline the many challenges that our Chinese-controlled debt has left us powerless to address. China’s currency is undervalued, leaving us at a trade disadvantage. Their alliances with rogue nations threaten our security. Their thirst for natural resources drives up commodity prices.

The human rights abuses that occur at the hands of the Chinese government would be appalling to many Americans. Religious minorities and political dissidents are the constant targets of state-sponsored oppression. An unkind word about the ruling Communist regime can result in years in prison, forced labor, or execution.

America has long stood against such violations of human rights. But as a nation indebted to China, our ability to push for change is undeniably limited.

On all issues, say the authors, “Washington’s decision-making is constrained by our inability to do anything that risks upsetting the [People’s Republic of China].” Indeed, a government that loses its sovereignty to its bondholders cannot guarantee prosperity or freedom. And, at the end of the day, an economy that is controlled by China cannot possibly compete with China.

Democrats in Washington seem not to have awoken to this reality. While they may talk a good game, it is only the Republicans in the House of Representatives that have offered a balanced budget. So either President Obama and Senate Democrats do not see the threat we face, or, more troublingly, they do not care.

After passing the $15 trillion mark, our debt will only continue to rise. But that unfortunate milestone should serve as a wakeup call to all Americans. We must elect a Republican president who understands the threat we face. Otherwise, Democrats’ debt will be our undoing. The American Century could become the Chinese Century—because as the sun sets on the West, it most certainly will rise in the East.