Oh yeah, they sure do. The US is the world's largest debtor nation. Some excerpts:
Foreigners now hold nearly 50 percent of the federal government's publicly held debt.
Foreign governments have taken notice - in particular, China, which now holds more U.S. Treasury debt than any other country. In the 12 months through April, China's portfolio of Treasury debt securities has soared by more than a quarter of a trillion dollars to nearly $800 billion.
Ronald Reagan, among others, must be rolling in his grave at the thought of us owing China so much money.
Being in debtor status or even having a large amount of debt is not new. What is new is the globalization of the economy and the consequences arising from business and public policy decisions associated with the new world order we live in. We have no one to blame but ourselves and we are happily continuing with BAU because most folks either do not recognize (let alone understand) what is happening, or don't believe they can change (even on a personal basis) the direction we are headed in. I suspect that many of us will resist change that has an immediate negative effect on us even if it would result in a long term improvement. Checkbook economics generally will trump all other considerations.
The problem with that approach is that it only postpones, and perhaps aggravates the impact of, the day of reckoning. Much of the sober analysis of the state of fossil fuels agrees that in a generation (or less) we will see seriously high prices as production costs increase. Drilling on the OCS or in the Arctic won't come cheap, and neither will shale if it clears the technical and environmental hurdles to production. Renewables won't have sufficient scale to fill the gaps. Climate change will continue unabated and there is little evidence to suggest that the migration north of flora and fauna previously restricted to southern latitudes will go into reverse. The impact on agriculture, already dominated by a handful of corporations, is yet to be determined. Even if climate change was not a factor to reckon with, the costs of fossil fuel decline will be felt because agriculture is heavily mechanized and relies on chemical fertilizers, which include fossil fuel inputs.
Add the already struggling economy to the mix above and we are clearly in a difficult spot. Individual attention to our personal circumstances is the first step to achieving a new balance in our lives. Additional attention to the platitudes and smooth talk of our politicians is also called for. Public policy decisions, and the associated financial and social costs thereof, must be vigorously reviewed before we put our support behind new initiatives or continue past practices.
Failure to do anything at all, in the misguided expectation that America will "grow" its way out of our predicament, technological innovation will rescue us, or the government will be there with the safety net no matter the cost, is worse than foolish. It is a recipe for failure and potentially for collapse. I said before that things are different. Here is the reason: China.
In its annual financial stability report issued on Friday, China's central bank once again declared there were serious problems with the global monetary system's reliance on a single dominant currency - the dollar. An estimated 65 percent to 70 percent of China's $2 trillion in foreign exchange reserves, the world's largest stockpile, is held in dollar-denominated assets.
The People's Bank of China also warned the United States on Friday about its very expansionary monetary and fiscal policies.
Like it or not the Chinese are in the catbird seat. If our positions were reversed our government would be calling on the Chinese for restraint. The Chinese are the game-changers this time. They can call the shots if they choose to. We cannot afford to annoy them too much as we need them and quite likely more than they need us.
How long before we reconsider our way of life and what makes for a "good" life? How long before we come to consensus as a society that we must make these changes if we are to survive as a society? If you believe the American way of life is non-negotiable then you better have a definition that can withstand the shocks that are coming at us. Otherwise you will be in for a very rude awakening.