US Navy Chief : U.S. Cannot Outspend China, Must Use Allies To Counter

[Shotgunner51]

American debt obligations are different in nature from that of many countries. For perspective, American Treasury Bonds are offered to potential investors around the world to generate revenue. This mechanism shapes American external debt obligations and records accordingly. As I pointed out in my previous post, American books will check out differently in comparison to many countries due to how USD is globally circulated and utilized. The system works though - it simply defy traditional perceptions of economy in which net surplus is the only indicator of a flourishing economy. This is misleading as well. Economic realities should be viewed in the context of inflows and outflows and how things can be balanced and obligations can be fulfilled. Economic realities are increasingly complex with 50 shades of grey.

To me, American spending on its health sector is most puzzling. US spends so much on this sector but American health system is not what it should be.

Yes buddy I've seen even more absurd articles that peddle similar narratives, especially when US is about to raise debt ceiling, very entertaining to read. Like recently they are raising another round of $480B is that right? Of course there would be pro-debt voices again like "deficit is OK", "sky is our limit" and such, I hope these faithful people pour in their family savings to show what they mean.

Though financially US looks like a bigger version of Greece, but of course US is no Greece, different laws of physics apply to the Dollar, puzzling almost magical.

But like Greece, the rest of the world can't run away from law of physics and have to live accordingly, i.e. work hard, save surpluses if there's any, control your deficits/debts. Who are the surplus guys, the creditor guys? The largest is Japan, followed by the likes of Germany, China, Hong Kong, Norway, Singapore, Taiwan, Switzerland, South Korea, Netherlands. If you take out hated China (assuming a US perspective) from the list, how does it look? Advanced manufacturing/services, high standard of living, low Gini Index, high social welfare, and strong fiscal discipline, sounds nice to me. I remember Deng Xiaoping sent officials to Singapore to learn urban planning, brought Japan industrial capital to Shanghai, let Hong Kong FDI constitutes >60% of all and revamp entire Guangdong province, etc., setting our country in the right motion, and we are picking up momentum to go forward in that direction. Exceptional US will continue to be the largest debtor nation on this planet, foreign debts will skyrocket with no limit in sight, China will continue to go in exactly opposite direction, competing in the ring of creditor nations you saw above. China is no US, is not competing with US, and never becoming another US.

 

[Get Ya Wig Split]

Add Japan, South Korea, Australia and Israel to the list and you get almost 1.5 Trillion in defense spending every single year. China has no chance.

 

[SaadH]

America doesn't have enough money to compete with China?

If you added up the military budgets of india, britain, australia, canada, france, Italy, Germany, South Korea, Japan, Arabia, China and Russia it would equate to america's military budget which is sitting pretty at $770!! So for the americans to say they can't compete with China by outspending it, proves that American supremacy no longer exists.

Of the 12 countries mentioned, 10 are allies of America. Makes one wonder who is America really having it's behemoth military for?

PPP, things cost a lot less in China to manufacture then they do in US. Hence, even with a humongous $770 bn budget US is only at par with China's budget at best.

 

[truthseeker2010]

This sounds like 'misdirection'.

American military budget is massive already and they have numerous modernization projects in the works. Equipping allies will reduce pressure on them. Imagine how much NATO can spend on the military as a collective.

A whole new bunch of military capabilities will emerge in the Pacific by the late 2020s. This is how pressure on China will be created.

Remember USSR? Arms race becomes expensive and damage countries in the long-run. China should avoid falling in this trap. Just build enough for your needs and concentrate on human development. To 'build enough' is good strategy instead of trying to match a rival on bullet for bullet basis. This is how Pakistan does it.

Aukus effectively ended NATO, and much of europe don't want to hostile with China, they mean business.

American military spending is already on its limits. The 20's would be full of inflation and fiscal cuts around the world.

China's % of GDP on defence is already one of the lowest. Whereas its infrastructure is the best as compared to US which is depleting every year.

It looks like US is becoming the modern USSR.

 

[XDescendantX]

“Shasojian” Strategy.

???

 

[Pak_Sher]

A single Chinese DF-41 armed with 4 FOBS warheads (like the one they just tested in August) would require 16 GBI interceptors (per US doctrine of 4 interceptors per warhead) to have a decent chance to intercept. 14 GBI interceptor in Alaska cost approx. $1 Billion back in 2012. The Chinese offensive can outspend the US Defense capabilities. There is a limit to what even the US can spend and what results it can expect to achieve. The Chinese are building hundreds of ICBM silos in the north of their country, but probably will only have a few dozen missiles. For the Chinese it might cost under $10 billion what it will cost the US hundreds of Billions of dollars to counter. It’s the “Shasojian” Strategy.

China is doing hundred of billions of $$$s business with the US & the Western World. All of that will come to a halt to zero. It will be financially devastating for China especially when the US stops paying on the Chinese Debts. So it is easier said then done.

 

[SaadH]

View attachment 786464

Add Japan, South Korea, Australia and Israel to the list and you get almost 1.5 Trillion in defense spending every single year. China has no chance.

Japan, SK, Aus, US, Israel and Western European countries are all high income countries and form 95% of the spending. In comparison China has PPP advantage over all of them and since China makes all of it's defense products and pays it's fighters in local currency it has 3 to 1 advantage on the PPP terms. China's current defense spending in dollar terms should 3Xed to get a more fair comparison.

 

[MH.Yang]

I heard they might get rid of debt ceiling altogether? Anyway they still can raise it every now and then, spending continues, no country ever let alone China can match that. Thanks to Federal Debt, US International Investment Position continues to sink to another record low of -$14.30 trillion (as of end 2021Q1), I believe those in financial industry knows what it implies, especially in the long run.

International Investment Position | U.S. Bureau of Economic Analysis (BEA)

www.bea.gov

.

How long can China keep holding? After awhile it will have to give way.

USA can indeed print dollars without restrictions. But there must be goods for these dollars to buy, otherwise it will cause global inflation, just like now. Only China can produce enough goods, this is why USA is eager to negotiate with China recently now. Once there are not enough commodities to lead to inflation for a long time, the dollar system is bound to collapse. As long as the dollar system collapses and the world's dollars return to USA, USA will become Zimbabwe.

 

[FuturePAF]

China is doing hundred of billions of $$$s business with the US & the Western World. All of that will come to a halt to zero. It will be financially devastating for China especially when the US stops paying on the Chinese Debts. So it is easier said then done.

I’m not saying what China could be doing, I’m saying China has already done. The US will incentivize its companies to leave regardless, and China will try to incentivize them to stay. Competition. IMHO, China won’t go to war over Taiwan and/or with the US, unless Taiwan changes its status or China thinks its window of opportunity is closing. The US can just keep up (if it develops the right capabilities) and China will probably counter as much as it can. It’s a contest of endurance.

???

In the 90s the Chinese has a concept of asymmetrical weapons and strategies to take on US military supremacy in the region, such as the DF-21D “carrier killer”. They called these weapons; Shashojian or “Assassins Mace”

 

[Shotgunner51]

USA can indeed print dollars without restrictions. But there must be goods for these dollars to buy, otherwise it will cause global inflation, just like now. Only China can produce enough goods, this is why USA is eager to negotiate with China recently now. Once there are not enough commodities to lead to inflation for a long time, the dollar system is bound to collapse. As long as the dollar system collapses and the world's dollars return to USA, USA will become Zimbabwe.

IMF has warned many nations on fiscal discipline when they have severe deficit/debt problems, especially when they fall below -60% (NIIP as of annual GDP), now look where US is by 2021Q2. But of course, IMF can't warn US, it's exceptional.

It's predictable, and has come to reality, and is predicted to sink further with no bottom in sight, perhaps -100% soon? -200% in 5 years? The question becomes: Who can fill this ever-expanding global USD blackhole? Germany can't, they have to feed debtors in Euro zone. Russia has decided not to play this Ponzi Scheme. China, Japan and GCC, there are limits even if they are willing to help. Sooner or later US will have to turn towards US citizens, that includes continue to draw down from the already massive unfunded liabilities (by now ~160 trillion). And like you said, inflation is destined to increase. But perhaps these are minor issues or no concern for US, priority should be military.

 

[MH.Yang]

1, China's shipbuilding capacity is 30 times that of the USA(per year 12 million tons:0.4 million tons)
2, The cost of shipbuilding in China is less than half that in the USA
055's cost is $0.9 billion.
Burke's cost $1.85 billion.
3, The USA lacks manufacturing, their government spending will cause prices to rise. But China will not, our production capacity is seriously surplus, and the government's spending on warships will only stimulate economic development.
4, Chinese warships are 100% domestic, from electromagnetic ejection devices to soldiers' underwear, all made in China. Chinese warships do not need to spend foreign exchange, and all the costs will enter our economic internal circulation. Or maybe we need to import some iron ore from Russia?
5, The most important difference is that China's social stability far exceeds that of the USA. Can American people tolerate a further three fold increase in military spending? Can the greedy Military industrial complex accept that the USA does not enter China's arms race trap?

The biggest problem in the United States is the lack of manufacturing and social instability.
The biggest problem in the USA is the lack of manufacturing and social instability. We will challenge in these two areas.
In Chinese, danger=危机. It has two words. 危 means danger and 机 means opportunity. The Chinese believe that danger and opportunity coexist.
So we think the Taiwan issue is not necessarily a danger for China, nor is it necessarily an opportunity for the United States.
In another 20 years, we will know the answer.


The USA can prepare for the arms race. We will compete who has better manufacturing and social stability.
Don't die in the same way as the former Soviet Union, because it would be a great irony.
I forgot that the USA can print money, or another 4 trillion? LOL

China is doing hundred of billions of $$$s business with the US & the Western World. All of that will come to a halt to zero. It will be financially devastating for China especially when the US stops paying on the Chinese Debts. So it is easier said then done.

1. Almost all U.S. debt owned by China is in kind. These debts are bearer and transferable.
2. Without goods, all financial assets are waste paper.
3. China's market size has exceeded that of USA, and its GDP will exceed that of USA in a few years.
4. Are U.S. allies really reliable? In addition to aukus, other allies want China and USA to die together.

 

[Pak_Sher]

I’m not saying what China could be doing, I’m saying China has already done. The US will incentivize its companies to leave regardless, and China will try to incentivize them to stay. Competition. IMHO, China won’t go to war over Taiwan and/or with the US, unless Taiwan changes its status or China thinks its window of opportunity is closing. The US can just keep up (if it develops the right capabilities) and China will probably counter as much as it can. It’s a contest of endurance.

In the 90s the Chinese has a concept of asymmetrical weapons and strategies to take on US military supremacy in the region, such as the DF-21D “carrier killer”. They called these weapons; Shashojian or “Assassins Mace”

China is trying to make engines for 4th Gen Aircraft & US is working on 6th Gen. US perfecting laser weapons which cost $1 one dollar a pop. Warfare is rapidly changing

 

[Beidou2020]

US has no interest in paying off the debt. That’s why they are spending like crazy. They might as well get all the benefits of being the reserve currency. They will default and tell the creditors to get stuffed. All foreign creditors will be threatened. US will default and then resume to run up the deficits again. The foreign creditors will resume buying US debt. The world will continue this Ponzi scheme.

Only sovereign digital currencies can disrupt this dollar-based global financial system.

 

[SuvarnaTeja]

PPP, things cost a lot less in China to manufacture then they do in US. Hence, even with a humongous $770 bn budget US is only at par with China's budget at best.

Exactly. In PPP terms Chinese GDP is already larger than that of the US.

 

[baqai]

so basically they are looking for peasants to do their dirty laundry while they sit back and chillax