How would Sensible Tax Reform affect the need for the U.S. Government to borrow abroad?
Because our federal debt is so large and our national willingness to save is so poor, the American government has borrowed more than $2 trillion abroad. Most of that has been borrowed from foreign governments, including $500 billion from the Government of China and more than $600 billion from the Government of Japan. This is bad economic policy. But, much more importantly, it places the U.S. Government in a much weaker bargaining position when negotiating with foreign governments on political as well as economic issues. STR will greatly strengthen the ability of American businesses to compete globally, reduce federal deficits and increase American savings. Those factors will slow our governments need to borrow abroad.
