Obama says U.S. can't keep borrowing from China

Obama says U.S. can't keep borrowing from China

May 14, 2009

RIO RANCHO, New Mexico (Reuters) – President Barack Obama raised the prospect on Thursday that China and other nations could stop buying U.S. debt and said the United States needed to tackle its deficit to avoid long-term economic damage.

"The long-term deficit and debt that we have accumulated is unsustainable. We can't keep on just borrowing from China or borrowing from other countries," Obama told a town hall meeting event in New Mexico.

"We have to pay interest on that debt and that means that we're mortgaging our children's future with more and more debt," he said.

China is the single largest holder of U.S. debt and owned $744 billion worth of U.S. government securities at the end of February, the latest month for which data is available, according to the U.S. Treasury.

http://news.yahoo.com/s/nm/20090514/pl_nm/us_obama_china_debt_1

China has 'canceled US credit card': lawmaker

Apr 30, 2009

WASHINGTON (AFP) - China, wary of the troubled US economy, has already "canceled America's credit card" by cutting down purchases of debt, a US congressman said Thursday.

China has the world's largest foreign reserves, believed to be mostly in dollars, along with around 800 billion dollars in US Treasury bonds, more than any other country.

But Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February.

Representative Mark Kirk, a member of the House Appropriations Committee and co-chair of a group of lawmakers promoting relations with Beijing, said China had "very legitimate" concerns about its investments.

"It would appear, quietly and with deference and politeness, that China has canceled America's credit card," Kirk told the Committee of 100, a Chinese-American group.

"I'm not sure too many people on Capitol Hill realize that this is now happening," he said.

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