Fact-checking Romney on "borrowing money from China" By Edmund Blackadder in Edmund Blackadder's Diary Wed Oct 03, 2012 at 10:55:20 PM EST Tags: politics, economics, debate, debt, foreign debt, intragovernmental holdings, debt doesn't matter, modigliani-miller theorem, reagan proved it, japan's 200% debt to gdp (all tags)
	Near the beginning of the first presidential debate, Romney said (transcript): What things would I cut from spending? Well, first of all, I will eliminate all programs by this test, if they don't pass it: Is the program so critical it's worth borrowing money from China to pay for it? And if not, I'll get rid of it. Obamacare's on my list. But only 7% of the debt is held by China.

Wikipedia article on US debt: At the end of September 2012, debt held by the public was approximately $11.311 trillion or about 72% of GDP. Intra-governmental holdings stood at $4.848 trillion, giving a combined total public debt of $16.159 trillion[4][5] [6] As of July 2012, $5.3 trillion or approximately 48% of the debt held by the public was owned by foreign investors, the largest of which were China and Japan at just over $1.1 trillion each.[7] [7] U.S. Treasury-Data Chart Center Japan's debt-to-gdp ratio: 229% US vs. China money supply growth (M1) US vs. China money supply growth (M2) Conclusion: China creates as much or more money than the US, and Japan has over twice the debt-to-gdp ratio that the US has; both continue to buy US govt bonds because the US is a great investment. Also, their holdings are a small fraction of the money the US borrows, about a quarter of which are intragovernmental lendings. Fact-check status on Romney: Pants on fire.

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transcript Wikipedia article on US debt U.S. Treasury-Data Chart Center 229% US vs. China money supply growth (M1) US vs. China money supply growth (M2) Edmund Blackadder's Diary