LDS Living Magazine - Did China Bail Us Out?

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Did China Bail Us Out?
by Dave Ramsey

Dear Dave,

Where did the government get all of that bailout money? Did they print it, or did they borrow it from China?

Carl

Dear Carl,

It’s none of the above. When the government runs a deficit, which means it spends more than it makes (that, of course, happens every moment of every day) it borrows money by selling U.S. government bonds, or treasury bonds, on the open market. China owns some of these bonds, but they certainly don’t own them all.

Treasury bonds are sold to lots of investors. Corporations buy them, as do individual investors, because these bonds are theoretically some of the safest on the planet. So don’t worry about the China angle, Carl. They didn’t make us a direct loan of hundreds of billions of dollars to handle the bailout. That’s just another bunch of conspiracy theory bull.

– Dave

Please visit www.davesays.org for more financial advice.

Photo by Hauke Neddermann

Comments on this article	ADD COMMENT
Baloney Posted by Alan from Utah "America is relying on foreign investors to purchase most of its debt these days – more than 80 cents of every dollar of new debt since 2001 has been purchased by foreign investors." Source: http://budget.house.gov/faq_budget.shtml To imply that a concern for foreign debt is a "conspiracy" is ridiculous. Read the link.