We borrow money from China and then give some back as foreign aid

Pretty much everyone in the U.S. knows that America’s debt to China is measured in the trillions of dollars. As of May 2011 the largest single holder of U.S. government debt was China, with 36 percent of all foreign-held U.S. Treasury securities. The current estimate is that China now holds between $1.25 and $1.5 trillion of U.S. debt.

What most of the public is not aware of is that some of the money the U.S. borrows from China is used for foreign aid back to China. It’s not much different than robbing your kid’s piggy bank to pay their allowance. How did we become so stupid?

Direct foreign aid to China pales in comparison to what we borrow from China, but it ain’t chicken feed. While direct foreign aid to China may only measure in the tens of millions of dollars, indirect aid, that being aid the U.S. gives to international organizations that they feed to China is much, much more.

A surge of frustration is spewing from Capitol Hill over the aid to China but this isn’t news. The U.S. has been providing foreign aid dubbed “development aid” to China since the Nixon administration.

Sen. Tom Coburn (R-OK), noted watchdog said, “Why in the world would we be borrowing money and then turn around and giving it back to the countries that we’re borrowing it from? If they have enough of a surplus to loan us money, they have enough of a surplus to take care of their own needs.”

We’ve been doing the same thing for years so where was the congressional outrage before now? Political pundits have been commenting on the lunacy of borrowing billions from China to turn around and send a portion back to the Chinese in the form of not loans but development grants.

Sen. Jim Webb (D-VA) asked the same question in a recent appearance on Fox News: “Hey, in the crisis that we’re in right now, should we really be continuing to send American taxpayer dollars over to China for these purposes?”

Donald Trump had it right when he said the Chinese are laughing at us. Our debt to China grows with each day, we send millions each week in interest payments and then we literally give them free money.

Dan Ikenson summed it up pretty succinctly, “How silly this is of the United States to be subsidizing the faster-growing, second-largest economy in the world.”

The argument for providing aid to China back in the ‘70s was to gain influence and utilize American aid to modernize the Chinese economy with a decidedly capitalistic aim. It worked; perhaps a little too well.

While we’ve been mortgaging our future to China, they’ve been stealing intellectual property, carrying on cyber attacks and manipulating their currency all the while building a greater and greater trade imbalance with the U.S. The Chinese take every opportunity to undercut the U.S. in an effort to displace us as the world’s largest economy and the efforts appear to be paying off. Current estimates suggest that China will usurp the U.S. in the very near future.

While the Senate recently passed a bill to punish Chinese currency manipulation, they did nothing to cut off American aid to our largest debtor.

Trump is right…we are a bunch of idiots.