The U.S. Should Be Ashamed to Go to the G-20

The time has now come for the U.S. to do something practical for the world economy. Lacking any tangible achievements, Americans should be ashamed to attend the G-20 summit taking place this weekend in Canada.

Over the past two years, the financial crisis that started in the U.S. has plunged the world into a ditch. This crisis clearly shows that the greatest danger in the global economy stems from those countries that believe their markets to be mature and stable. Until today, the rate of recovery in different countries has not been consistent. Still lagging behind are the developed countries of the Americas and Europe. Their alarming debt has already become like a sharp sword dangling dangerously above the head of the world economy.

What worries most people is the U.S. The problems that caused the financial crisis — i.e., excessive reliance on credit, excessive consumption, excessive financial speculation — have not yet been brought to an end. And half of the U.S.’ economic debt is foreign debt.

As of June 1 of this year, the total debt of the U.S. federal government has passed the $13 trillion mark, which is approaching GDP. If this total dollar amount were to be spread out equally among every American, that would be over $40,000 per person, of which $3,000 is owed to a Chinese person. This number is still rapidly increasing.

How will the U.S. deal with this huge debt? By repudiating the debt or letting the U.S. dollar depreciate? Past lessons have shown that either choice will result in a huge loss for creditors worldwide. What makes creditors even more uneasy is the U.S.’ method of shifting the burden of the crisis by printing excessive amounts of money and readily believing in trade protectionism.

Approximately $900 billion of U.S. national debt is in China’s hands, not to mention several hundred billion dollars of debt belonging to U.S. businesses. The safety of this huge American asset has already become a matter of great concern for the everyday Chinese person. Even the most common Chinese person now knows that the Americans, who owe us money, are not such good people.

Though the Chinese have not even had time to criticize the U.S., they have already been pressured by and received complaints from some members of the U.S. Congress regarding the RMB’s exchange rate. These members of the U.S. Congress seem to believe that the louder their voices are, the more easily they can divert the world’s attention and concern away from the U.S. economy. They seem to have miscalculated. The world’s focus will not leave the U.S. because everyone understands where the root of this crisis lies.

The world hopes that at the G-20 summit the U.S. and other developed countries will propose some specific and effective methods to revive the world economy. The world also hopes that the U.S. can finally muster up the determination to strengthen supervision over the activities of the financial sector, and do something substantial about those Wall Street speculators.

As Chinese, we hope that the U.S. can propose a specific plan for ensuring the safety of China’s U.S. dollar assets. This proposal needs to at least make the Chinese feel more at ease with regard to the American economic revival. If there is no formal reassurance, we will never dare to believe the promises that come out of the Americans’ mouths. We are already sick of hearing Americans complaining, and we are looking forward to them doing something substantial.

The root of this financial crisis has not been fully eliminated. On a large scale, whether the world economy will hit rock bottom again will depend on whether Americans can truly change their extravagant consumer lifestyle of relying on loans and on whether they can put a stop to Wall Street’s greedy nature. Regarding these questions, the world hopes to get an answer from the U.S. soon.