China Blasts US Debt 'Addiction'

Irate over credit downgrade, Beijing lets loose
By Polly Davis Doig,  Newser Staff
Posted Aug 6, 2011 8:18 AM CDT
This Monday, Aug. 1, 2011 picture shows the US Capitol just after the House voted to pass debt legislation. Standard & Poor's has downgraded the United States' credit rating for the first time.   (AP Photo/Jacquelyn Martin)
camera-icon View 2 more images

(Newser) – If Washington thought last night's credit downgrade was a just a nightmare, it woke up this morning to the cold, hard reality of China bashing it over the head for its free-spending ways. In what the New York Times calls a sign of America's plummeting global cachet, Beijing harshly told the US to "cure its addiction to debts" and "live within its means"—no small jab coming from the US' biggest foreign creditor, which holds some $1.1 trillion.

China, sitting atop scads of cash, has little choice but to continue buying US debt, notes the Times—particularly since a pullback could devalue the Treasuries it already holds. But that doesn't mean it's pulling any punches: “The US government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” said the statement. Beijing also blasted Washington over its “gigantic military expenditure” and “bloated social welfare” programs.

My Take on This Story
Show results without voting  |