Obama absent as China scolds U.S. for debt addiction
U.S. President Barack Obama remained largely silent as China, the largest foreign holder of U.S. debt, demanded Saturday that America confront its "addiction to debts" in the wake of Standard & Poor's decision to downgrade the U.S. credit rating.
The president, spending the weekend at Camp David, left it to press secretary Jay Carney to say it's clear Washington "must do better" in tackling soaring deficits and other economic woes.
China currently owns $1.2 trillion of U.S. Treasury debt, the largest stake of any central bank. The commentary carried by the state-run Xinhua News Agency was Beijing's first official response to the S&P decision.
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," Xinhua said. It said the rating cut would be followed by more "devastating credit rating cuts" and global financial turbulence if the U.S. fails to learn to "live within its means."
"China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets," it said.
With Obama absent in replying to the S&P downgrade, it was up to aides to defend his administration, noting that two other ratings agencies — Moody's and Fitch — are for now keeping the triple-A rating for U.S. debt.
Xinhua said the U.S. must slash its "gigantic military expenditure and bloated social welfare costs" and accept international supervision over U.S. dollar issues.
Last month, China's top general, Chen Bingde, also linked America's financial woes to its military budget and asked whether paring back on defence spending wouldn't be the best thing for U.S. taxpayers.
Such comments reflect Beijing's desire that Washington reduce its military presence in Asia. The U.S., rattled by China's military buildup, also routinely chides Beijing for its fast-growing defence spending. Xinhua also suggested a new global reserve currency might be necessary to replace the dollar, a position China has frequently advocated.
"Mounting debts and ridiculous political wrestling in Washington have damaged America's image abroad," Xinhua said. "To cure its addiction to debts, the United States has to re-establish the common sense principle that one should live within its means."
Obama absent as China scolds U.S. for debt addiction - Politics - CBC News