Why You'll Soon Be Paying Rent To The Chinese

Today, I want to talk about something easy and basic, something that every American should understand.

When you borrow money, you eventually have to pay it back – plus interest.

That’s all you need to know to understand the financial crisis and the terrible consequences we face if we don’t stop borrowing money from foreign creditors.

Before the financial crisis of 2008/2009, America was caught up in a huge debt-financed spending boom. Our trade deficits were soaring out of control simply because we continued to consume more than we produced. The debt to finance this consumption piled up in the form of mortgages and the federal deficit. It enabled the housing boom, which in turn created the structured-finance debacle that wrecked AIG and wiped out Bear Stearns and Lehman Brothers.
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