On People’s Daily Online, Niu Wenxin, Managing Editor and Chief Commentator of the CCTV Finance Channel, commented on the “sky-high" U.S. debt. Niu argued that, technically speaking, the U.S. government is already bankrupt. The total U.S. debt in 2007 was $US73 trillion, including hidden debts such as social security liability and bonds issued by companies with government guarantees or by local governments, but the total of U.S. current assets is only $US50 trillion. “The best choice for the U.S. is to repudiate its debt” and “force other countries to accept U.S. debt restructuring.”
“It is a ‘zero-sum’ game. If the U.S. wins, other countries (including China) will lose.” Niu then listed four reasons why China should not tighten its monetary supply: 1. Such a tightening will suppress economic growth. 2. It may lead to a financial crisis and recession in China. 3. It will cause higher unemployment. which in turn will result in social unrest and challenges to the CCP’s ruling position. 4. Europe is trying to hang on to the U.S. and hopes China will be sacrificed.
Source: People’s Daily Online, August 1, 2011