If You Owe Somebody a Trillion...

Treasury Secretary Paulson says: If we owed China $100 billion, we would have a creditor; but we owe China $1 trillion, so we have a partner:

Washington Wire: Paulson Unconcerned Over Build up of Chinese Forex Reserves: U.S. Treasury Secretary Henry Paulson downplayed any concern that China's massive reserves of dollar assets could give it undue influence over the fate of the U.S. economy. In an interview, Paulson dismissed some economists' concerns that China might dump its dollar assets, now approaching $1 trillion, or cut back sharply on its purchases -- moves that could theoretically send the dollar down and interest rates up.

"I don't see any one organization holding such a big percentage of our securities that I'm concerned," he said between meetings with senior Chinese officials. "And I really don't believe that foreign investors invest in U.S. securities because they're trying to do us a favor. They invest in U.S. securities because it's in their best interests to do so, and because of the confidence they have in the U.S. economy." --Michael M. Phillips