by Jeff Reeves | December 2, 2011 3:06 pm
If you need any further proof Congress is broken and that our government is more concerned with killing jobs than creating them, here’s the latest absurd headline:
As U.S. legislators focus on cutting federal spending to the bone, China wants to rebuild America’s roads and bridges.
Speaking to the American Chamber of Commerce in China on Friday, Chinese Commerce Minister Chen Deming said he thinks the Asian superpower should help rebuild U.S. infrastructure and invest in clean energy and technology here in the States.
The goal isn’t altruistic, of course. China wants to convert its stockpile of U.S. government debt into something else — especially in the wake of the August S&P credit downgrade and grumblings of another knock from one of the agencies in 2012 after the utter failure of the congressional supercommittee to reach a compromise on cutting the federal debt.
China’s move is a shrewd way to achieve that goal. Many in the West are painfully aware of Beijing’s power when it comes to sovereign debt, and the unceremonious dumping of foreign reserves would shake the market — especially considering the uncertainty surrounding euro zone debt. Many observers fear that a grumpy China could use America’s spendthrift ways as a political weapon. After all, it is our largest creditor.
However, a subtle shift in China’s $3.2 trillion in foreign reserves toward U.S. municipal investments and private infrastructure work wouldn’t imperil America’s ability to borrow, but it would reduce the China’s stockpile of Treasuries and similar investments. Right now, China holds over $1 trillion in Treasury and other U.S. government debt.
Another interesting rub is that China believes that helping America’s economy function better — that is, move goods around faster and provide a jolt to the labor market with construction jobs — is in its own national interest. As China looks to reduce its heavy reliance on exports, it needs Americans to start providing goods and services to rebalance the trade relationship. In this interconnected global economy, a rising tide does truly lift all boats (just as Europe’s ebbing tide threatens to sink them all).
Just look around your hometown, and you’ll see the need for such an investment. We have crumbling roads, aging airports, creaking railroads, poor public transportation and a power grid that isn’t equipped for 21st century energy technologies.
But worse than all that is the state of affairs in Congress, where do-nothing legislators and partisan hacks continue to abdicate their responsibility to protect the nation’s interest.
The saddest part of all isn’t that our infrastructure is second rate. It’s that unless China helps rebuild America, it may take years for the U.S. government to get off its keyster and do the work itself.
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