Quote

Essentially, when we run a deficit, we are borrowing money to buy things that are made overseas.

I have serious concerns about whether it's prudent to give any foreign country substantial leverage over the U.S. economy. Instead of spending $80 billion on important programs here at home, we're sending this money overseas just to pay interest on our debt.

U.S. capital formation, which has been pretty high in the '90s and very high in the late 1990s, is what is being financed by the savings of the rest of the world, generally poorer than ourselves, because our deficit on current account, chronic deficit, is their surplus, and they have been willingly bringing that to the American market.

I want to share with the American people that President Bush and the Republican majority in just 4 years have borrowed $1.05 trillion from foreign nations. That is selling our country to other nations because of the spending that is going on.

To finance deficits, the government must sell bonds to investors, competing for capital that could otherwise be used to invest in stocks or corporate bonds. Government borrowings raise long-term interest rates, stifling economic growth.

The amount of U.S. debt held by countries such as China and Japan is at a historic high, with foreign investors holding half of America's publicly held debt. This dependence raises the specter that other nations will be able to influence our policies in ways antithetical to American interests.

The United States as usual has a sizable deficit in the current account of its balance of payments, trade account and other current accounts, current account items.

America's largest trade deficit is with China, a nation that enjoys Permanent Normal Trade Relations with the U.S. and ties its currency to the dollar to make it a more competitive trading partner.

But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar without the adverse effects that followed currency declines in other countries.

When the U.K. or U.S. government issues bonds to fund a deficit, the buyers are not solely in the U.K. or the U.S. - they're in Asia, Europe, Latin America and the Middle East. Investment banks provide direct access to these buyers.