Richard Wolff presented this video China – US’s First Real Competitor in a Century.

For the first 30 minutes of this talk, I was thinking so highly of this video, that I almost couldn’t wait to share this on my Facebook page. It all turned sour at about 30 minutes. Here is the comment I posted about his attempt to explain USA debt to China.

I was going to praise this talk highly until you went off the rails at about 30 minutes. This is where you let your ignorance of Modern Money Theory get the best of you. You talked about the problem of the USA paying China for the money that China “lent” to the USA by its purchase of USA Government bonds. You wonder what will happen if China demands repayment of the loans. You should wonder more deeply about that very question. What kind of repayment of these loans can China expect? What do we have to give them to replay the loans? The only thing they are legally entitled to for repayment is more USA money. Who can create this money out of thin air? The USA Government agency called the Federal Reserve Bank creates this money. The money does not come from collecting taxes from the USA citizens who are also recipients of money created by the FED. Just having you think about this ought to be enough to give you pause.

As I post this, I am not sure I can stand to watch the remaining 20 minutes or so of this video. Now that I have gotten this off my chest, maybe my curiosity will take me through the rest of this piece.