President Obama appealed to the American people last night in a televised national address asking them to support a “balanced” plan to avoid imminent financial default. Declaring that the “the world is watching,” Obama called for compromise between the Democrats and Republicans to maintain U.S. credit worthiness and global standing.
There can be no doubt that the world is indeed watching. Investors in European and Asian markets are nervous as a country long considered to be a cornerstone of the world economic system teeters on the brink of insolvency. And, of course, it’s not just our investors that are worried, our creditors are also concerned. Here at U.S. Role we are very aware that the U.S. was at one time the world’s largest creditor nation. That was a #1 distinction we could be proud of. Sadly, that status ended in the 1980’s. Now we are the world’s #1 debtor nation. And who exactly do we owe? Business Insider recently compiled this list of our creditors and it makes for some interesting reading. I found it surprising that although there are countries listed (we owe China, Japan, and the UK, they are all are near the top of the list) a sizable chunk of our national debt is owed to domestic sources such as pension and retirement funds, mutual funds, and the U.S. Treasury. The fact that we may soon be unable to pay ourselves offers little comfort.
I’d like to think that leaders of both parties will act responsibly and pass a compromise agreement. With the world watching, I think we can agree that, paraphrasing Churchill, this has not been their finest hour.
Image Credit: Business Insider
