October 16, 2013: Another round of debt negotiations, anyone?
We’re getting down to the wire in DC. That might be a good thing, because we’re running out of metaphors to describe the debt default brinksmanship playing out on Capitol Hill. A deal (Another deal! So many deals!) to lift the government’s borrowing limit and end the government shutdown, that is barrelling into its third week, is forming in the Senate, reports Alan Fram for the Associated Press, after a competing plan from the House of Representatives failed to materialize.
But it’s not just America that's cast anxious eyes on Congress. The world is watching, and not without a little bit of schadenfreude. In fact, some of the biggest holders of U.S. debt -- the governments of China and Japan -- are admonishing Washington for riling the global economy with its political impasse. America must “shoulder its responsibility” and “take concrete measures before Oct. 17 to avoid a default,” said one Chinese official, according to Ian Katz and Michael C. Bender of Bloomberg, while the Japan Times reports that Japanese Finance Minister Taro Aso told a news conference that “Many of them (in Washington) don’t seem to understand well the magnitude of the international impact this problem could have.”
Mr. Aso is right: It would seem they don’t. Still, it’s rich to hear complaints about the current imbroglio coming from two governments that have floated their own domestic economies by gobbling up American currency. Notes Mark Landler of the New York Times:
Economists who follow China’s monetary policy say that while Beijing has somewhat diversified its foreign exchange reserves, it continues to rely heavily on Treasury bills and other American government-backed debt. … Analysts estimate that 60 percent of China’s $3.66 trillion in reserves are still in dollar-denominated debt, though the precise numbers are a secret.
Wow, that’s a lot of money that China stands to lose. Let’s hope Congress gets this all figured out before the U.S. forced to decide whether Beijing bondholders or American senior citizens waiting for their Social Security checks will be paid first.
Elsewhere around the web:
Speaking of currency manipulation by an Asian government: Alliance for American Manufacturing President Scott Paul sat down with Todd Miller of Human Events to discuss Japan’s participation in the Trans-Pacific Partnership (TPP) trade negotiations. Japan, Paul says, should be denied entry to the pact if it doesn’t scuttle its predatory monetary policy:
Japan’s entry has to rest on a willingness to step away from currency manipulation and protectionist tariffs and embrace market-based monetary policies. TPP also needs to include enforceable currency provisions to stave off any thoughts of backsliding. Only with these agreements in place can TPP insure a fair, robust and mutually-beneficial trade environment for all participants.
Automakers are worried that the ongoing government shutdown is chipping away at consumer confidence, writes Jaclyn Trop for the New York Times, and thus might hurt the strong sales that have recently buffeted the industry.
Not all manufacturing news is necessarily global: Genzyme, a foreign biotech company, will invest $80 million in a Massachusetts manufacturing facility to expand its work on treatments for common illnesses. Chris Reidy of the Boston Globe has the story.
And don’t forget:
Because last month’s government update on America’s employment situation was considered nonessential, the Alliance for American Manufacturing (AAM) decided to issue its own. We asked our supporters across the nation to send in a jobs report as they saw it from their communities, and the results painted a picture of the American economy that a data dump can’t.
So no jobs report? No problem. Help us tell the jobs story that Washington won’t. Have you -– or your friends, family, or neighbors –- started looking for work recently? Have you stopped? Send in the jobs report from your town to info [at] aamfg [dot] org, tweet it to us at @keepitmadeinUSA, or contact us via Facebook. And read the report right here.
Happy Wednesday, America. Keep our fingers crossed for a debt limit deal.
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