Why does the United States have to keep up trade with China?
The way they help us pay for our debt is that the Chinese government buys a large number of US Treasury. When the government doesn’t have enough money to pay for the budget it has three choices. 1. Raise taxes, which are unpopular with people, especially in an election year. 2. Print more money, but the congress doesn’t have the power too. The Federal Reserve is actually in charge of that and they don’t print more money to help pay for a budget deficit because it would lead to hyperinflation They are also independent from congress . 3. Borrow from the public by issuing bonds. They issue bonds by the US Treasury. Anybody can buy them, for example US citizens, companies, the Federal Reserve, or foreign government like China. When they purchase our bonds they are helping us finance our deficit. They give us money and we give them IOUs. But in recent months the Chinese government has started to purchase other government bonds in order to diversify there holdings, decreasing the number of U
