Dear China, Here's Where Your Money Went

In a previous post I calculated the statistical causes of the US federal deficit and debt.  It was to answer the debate, once and for all, whether it was military spending or social spending that was the primary cause of our financial woes.  When the statistics were tallied it turned out nearly 2/3rds of the deficit/debt was caused by social spending and only 25% military spending.

However, while this addresses the budgetary issues facing the country (which will be summarily ignored), it does nothing to address the counterparty to this deficit spending.  Namely, our creditors. Specifically China.

The whole idea of "lending" money is that you do so expecting to not only get your principal back, but some interest income as well.  And the way your debtor will pay you back is by taking the proceeds from the loan and investing it in a venture that will generate a rate of return in excess of the interest rate being charged.

However, let's focus on the key word of that sentence - "invest."

To sane people or people who care about getting their money back the quality of the loan is based on the quality of the investment that money is used to finance.  Therefore it behooves the lender to analyze where the proceeds of the loan are going to go.  This was my primary job during my 15 year tenure in banking.  My job was to take loan applications, analyze their creditworthiness and determine whether they proceeds would not only be invested wisely, but generate a rate of return that would satisfy the debt obligations.

Out of the thousands of loans I analyzed a majority of them were bad investments.  Another real-estate development in an already-oversaturated market.  A loan to my boss' buddies with no collateral.  Sports bars for ex-jocks going through midlife crises.  And horse hobby farms for the trophy wives of insolvent faux "businessmen."  There was even the famous "cereal bar" where our money would be used to purchase milk (which does not make a good form of collateral).  But out of all these horrendous and idiotic investments, they are nowhere near as bad as the US government bonds you Chinese got suckered into buying.  And the reason is simple:

The majority of the money you lent us was not invested.  It was merely pissed away.

Consider a statistical break down of where your money was "invested" here in the US.

The Military 26%

One of the largest components of the US budget, your money was used to buy weapons and pay soldiers.  Sadly, the military is not an investment.  Matter of fact, it's quite the opposite.  The military is PURPOSELY designed to destroy things.  Not build them.  You will not get a return on your investment from the US military.

Social Security/Medicare 33% combined

The reason I combined these two is because of the delicious irony of how your money was "invested."  Social Security is paid to people who are retired or are disabled.  In other words, they don't work.  You are merely paying these people to live with no expectation of a return on your investment.  Worse still (and doubly ironic) is Medicare is basically paying to keep old people alive who are about to die anyway.  Instead of investing in the "youth" who might have the capacity to earn the money to pay you back, you are investing in old people who not only DON'T work, but will die soon.

Income Security 16%

Oh, you know how I said if you invested in the youth you'd at least stand a shot at getting some modicum of return on your investment?  Yeah, well there are some young people out there who could work, but they're lazy and just don't want to.  That or they so spectacularly screwed up their lives by having children they can't afford or some other such life-destroying move that they're too pre-occupied living off of others to be concerned about paying you back.  Besides, this is the dumbest segment of our society and they frankly probably don't know the different between China and Japan.

Health 9%

Remember those lazy people I was telling you about?  Yeah, the ones that don't work?  Well they tend to have children at higher rates than their responsible citizen counterparts, and so they need health care.  You could make the argument that these kids will grow up and maybe get jobs, thereby giving you a slim hope you might recoup a fraction of your investment, but a visit to one of our fine trailer parks, ghettos or barrios will show you the cycle of poverty these unfortunate children are condemned to.

Education 4%

You may have your final hopes pinned on that a small percentage (4%) of your money went into education and training.  This should make people more productive, get them higher paying jobs, and thus provide the tax base to finally pay you guys back.

Sadly, your hopes are misplaced, because unlike our Chinese and Asian counterparts, the majority of American education does NOT go to productive endeavors, but worthless frivolous ones, specifically the humanities and liberal arts.  The result is not only an industry that indoctrinates our youth into socialism and sloth, but gives them no real practical skills that will help generate economic growth.  You won't get your money back here, but at least Tina the Suburbanite Princess got her Masters in Transgendered 13th Century Sculpture Fairy Studies.  Thanks hard working Chinese people!

We could go on, but that accounts for nearly all of the money you've lent us.  And as you noticed none of these things even come close to "investments."

The sad truth is that America did not "invest" the money you lent us. It bribed.  It bribed our parasitic class to vote for democrat politicians, keeping them in power and preventing them from having to work real jobs (perhaps you are aware of our president's complete lack of real-world work?)  Oh sure, our leftist politicians say they're "investing," but that is nothing more than a co-opted word used to hide their true intentions.

The issue is what are you going to do about it?  I personally am shocked China, let alone anybody in the world lends the US government (and by association) our parasitic class money.  What is literally happening is we are essentially enslaving hundreds of millions of Chinese.  We have you work the menial jobs Americans are too lazy to work themselves, while stealing borrowing money to pay for those goods and services.  Thus the welfare mother doesn't work, but she still gets Chang at the Samsung plant to build her a nice new smart phone, bought and paid for with money you gave her via the US federal government.

What the Chinese people and its government have to understand is that it is unlikely you will ever be paid back the money you lent us.  Not because the US government chooses not to pay you back, but because the population of the US is decaying and declining to the point they are incapable of working up the economic growth to pay you back.  I can only hope (and grant permission to anybody who wants to) to translate this into Cantonese and/or Mandarin, and would love to hear arguments why the Chinese people are making such a horrible investment.

This post is now on Reddit.  Land of "This Guys An Idiot Because He Disagrees With Me."  Would be horrible if a Cappylanche were to happen and it gets voted up.