The main cause of this dilemma is however not the fact that America spends a lot. All countries are engaged in heavy spending but America made the crucial mistake of  not making any savings. Contrary to this the other nations are engaged in heavy savings. This is exactly why China is loaded with excess wealth which puts it in the position to give out generous loans to the United States and that too on remarkably low rates.

This unique change of events has been unprecedented to say the least. Economists are baffled as to how they could have overlooked this phenomenon. At the moment the Americans have little choice but to be patient and accept what they have available to them.

America is still quite heavily dependant on Chinese money which is being loaned out to them on highly generous terms. China has invested more than $ 1 trillion in America in the last ten years. The Chinese have invested in government bonds, manufacturing exports and mortgage debts. This has heavily helped the United States in a number of ways.

Many economists have clearly stated that the attitude of borrowing from China to save the local consumption deficit is not something that is going to bring America economic success. It may in the short term enable the country to sustain its present condition but in the long run if it is not complimented by other economic measures America is heading into a further economic ruin.

The United States however is still addicted to borrowing money from foreigners in order to finance its government spending in an attempt to bandage the broken economy. China is however making full use of the current situation and has managed to use it along with other economic measures to benefit itself.