One passage that struck me as particularly significant is when Wheelan explains the ongoing predicament of the United States and China. While I knew that there was an unbalanced relationship between the two economies, I did not realize the extent or possible consequences of the situation. The United States is indebted to China for about a trillion dollars. Wheelan describes the situation as an "unhealthy symbiotic relationship that has the potential to come unglued at any time" (Wheelan 266).
The United States has reason to fear from the unbalanced relationship with China because it is the debtor nation, relying on loans to maintain a strong economy. If China were to break this relationship, our economic position could plummet. However, Wheelan states that the Chinese have more reason to fear. The United States could simply choose not to repay its debts, or increase inflation in order to lessen the value of them. Wheelan says, "If someone owed me a trillion dollars and also had the authority to print those dollars, I would spend a lot of time worrying about inflation" (Wheelan 267).
I was not aware of how large of a role both China and the U.S. have in each other's economies and what great damage could occur. Wheelan states that the current relationship between China and the U.S. will come to an end, although we don't know when, why, or how, which imposes fear on both nations as well as on the rest of the world.
No comments:
Post a Comment