China currently owns about $1.277 trillion of US Treasury bonds. Needless to say, the prospect of a US credit default on 17 October is quite frightening to the Chinese government, and it has made it clear to the US that it expects a default to be avoided at all costs. It does not appear that the members of Congress who are threatening a default seem to care about the effects of a default on foreign creditors. It is important to understand that nervous investors will begin to act before the actual default if they believe that a default is inevitable, so market fear is becoming a real issue even now.
Meanwhile, income inequality in the US continues to widen. The most recent data, using statistics from the US Internal Revenue Service that extends to 2012, shows that breaking down the data into two sets [from 1947-79 and 1979-2012) indicates that the earlier period was one where most Americans shared in economic growth and the later period showed sharp divergence. The key difference in the two periods was the lower tax rates that characterized the second period. You can see the difference if you check the radio buttons in the graph. Pay particular attention to what happens to the 0-20% of the lower income brackets in the period 1979-2012 (hint, hint).
The US-Russian-UN agreement on the destruction of Syria’s chemical weapons appears to be proceeding well. I have never been more delighted to have been proven wrong, and my skepticism seems to have been unwarranted. There is no question that this process would not have begun without the strong support of Russia and Vladimir Putin. Let us hope that the process continues to go well and easily.
World Politics News 
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