This particular slim volume is called "Foreign Holdings of US Government Securities and the US Current Account."
Memo to Bushies: You are driving this country into the ground.
Ah, well. They haven't listened to anybody for six+ years; they sure aren't going to listen now.
The upshot of CBO Director Peter Orszag's testimony before the House Budget Committee last month is this: things can't keep going on this way. Someone has to decide whether the United States is going to take care of its own people or try to take over the world. Our current effort to do a poor job at both is putting us at great economic risk (moral and ethical, too, but the CBO does not delve into those things).
A few points from the report:
- Foreign holdings of U.S. Treasury debt have risen rapidly. Between 2003 and 2006, for example, such holdings rose almost 50 percent. They now exceed $2 trillion and account for more than 40 percent of Treasury debt held by the public.
- After the depreciation of physical capital is taken into account, the
nation saved only 2 percent of its income last year, an unusually low level for the world’s leading economy. At the same time, the nation’s net domestic investment was 8 percent of its income. The difference, 6 percent of income, was financed by increases in net foreign claims on the United States.
- Almost all official purchases of U.S. assets were made by a handful of Asian governments, particularly China, which did so in order to keep itscurrency from appreciating outside of the band specified by its managed exchangerate policy.
- The United States—like any other country—cannot continue accumulating debt at a rate faster than its ability to repay it. If policy actions or other economic developments do not reduce the current-account deficit, at some point foreign investors will become less willing to keep adding to their holdings of U.S. assets.
This seems to be another reason to end the baseless war in Iraq and to plug the end the endless stream of money we don't have that the war requires.
It also is another small piece of evidence that the American lifestyle of "buy now consume now" is going to end, and probably sooner rather than later.
The change will be hard, but not being prepared for it will make it even harder. And this country is not prepared for it.