Biden thanked China for funding US government – Terence P. Jeffrey.

How China Helped Fund America’s Massive Deficits

Obama’s First Term

During President Barack Obama’s first term, there was a massive spike in the annual deficits run by the federal government. In fiscal 2008, which ended a little more than a month before Obama was elected, the annual federal deficit was $458.55 billion, according to the White House Office of Management and Budget. In fiscal 2009, the year Obama was inaugurated, it spiked to $1.4 trillion.

Yet, trillion-dollar deficits persisted for three more fiscal years. As our government was running these massive deficits, the People’s Republic of China was significantly increasing its ownership of U.S. Treasury securities.

China’s Increasing Ownership of U.S. Treasury Securities

In January 2009, according to the Treasury, China owned $744.2 billion in U.S. Treasury securities. By January 2013, it owned $1.2142 trillion. That was an increase of $470 billion — or 63%.

Since the day that Vice President Joe Biden thanked the PRC for helping fund the U.S. government by buying our debt, what has happened on America’s fiscal front? In each of the last three years, the annual federal deficit has far exceeded $1 trillion. In fiscal 2020, the pandemic year, it hit $3.132 trillion. In fiscal 2021, it was $2.775 trillion. And in fiscal 2022, it was $1.375 trillion.

Meanwhile, the federal debt held by the public has increased to $24.627 trillion — and China has begun divesting from it. In April 2022, according to U.S. Treasury Department data, China’s holdings of U.S. Treasury securities dropped below a trillion to $976 billion. In each of the last seven months on record — August 2022 to February 2023 — China’s holdings of U.S. Treasury securities have declined. In February, they dropped to $848.8 billion.

Conclusion

Americans apparently can no longer rely on Communist China to help fund the deficit spending of our federal government. It’s time for our leaders to take responsibility and address the issue of our massive deficits and debt.

Photo credit: moerschy at Pixabay