With reference (and apologies) to Jerome’s throrough diary, the following is an interesting addition. Apparently the administration is not satisfied with the staggering debt of our citzenry. It is the aim of the Bush administration to achieve the same result abroad.
http://www.nytimes.com/2005/10/14/business/14yuan.html
MULAN, China, Oct. 13 – Treasury Secretary John W. Snow, touring this village in the Sichuan province to promote “financial modernization,” urged China on Thursday to take lessons from the United States on how to spend more, borrow more and save less.
Amazing, no? But there’s more:
Mr. Snow argued that China’s consumers and entrepreneurs are badly in need of financial sophistication offered by American banks and investment banks.
As he wandered through a thriving farmers’ market and a traditional rural credit cooperative, Mr. Snow said that with better credit, Chinese families would be able to spend more money, buy more goods and perhaps reduce China’s huge trade surplus with the United States.
“Good credit facilitation and consumer finance is going to help consumers buy more things,” Mr. Snow said.
And the reason for this interest in helping Chinese consumers? Perhaps Secretary Snow seeks to better the lives of ordinary Chinese citizens you say? Well, actually, no.
“We see consumerism and consumer credit as going directly to the thing we have most on our minds – the global imbalances.”
Ahh, so the reason we need to get the Chinese to accumulate debt is to alleviate the huge trade imbalance cause by our own rampant overspending. Now things are clear.
China’s savings rate is nearly 50 percent, one of the highest rates in the world. The savings rate in the United States, by contrast, has sunk to less than zero in recent months and is one of the lowest rates in the world.
So to all you oversaving Chinese citizens, start cooperating by spending yourselves into poverty, got it? Okay, just so we’re straight on that.