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America’s No. 1 Export is … Debt!
When you think of a country’s export, what comes first to mind? For most people, japan means cars. Saudi Arabia? Oil. China? Everything else.
How about good ol’ United States of America? It turns out that our no. 1 export is debt. Lots and lots of debt.
Here’s an interesting article by Justin Fox for TIME about how US has been selling $700 billion in debt securities to foreigners every year (the number is the same as the bailout plan, but that’s just a coincidence) and how the party’s coming to an end (maybe):
Our quandary is that we are apparently not capable of safely manufacturing $700 billion in debt securities to sell to foreigners every year, as we’ve been doing since 2005. (That this is the same total as Treasury’s bailout plan is just a coincidence.) If we keep trying to borrow that much from overseas–as you’ve probably gathered, selling debt means borrowing money–today’s quality problems may soon seem petty. For now, we can still reassure buyers around the world by slapping that GUARANTEED label on our debt. But as financial crisis and economic slowdown cause government debts to burgeon, and as commitments to Social Security and Medicare loom closer as baby boomers retire, that confidence could easily fade.
Crudely Wrott
