“American Debt Threatens Status as World Power,” read a headline on the CBS website this morning. “Can America Still Be the World’s Greatest Power, as the World’s Greatest Borrower?” asks CBS’s foreign correspondent Lara Logan.
What a difference a financial crisis makes, eh? When we published Empire of Debt in 2005, well before the crisis reached headlines, reporters, investors, consumers, politicians, sportscasters and insurance purveyors were all asking very different questions than they are today.
Logan interviews James Baker, former secretary of State, secretary of the Treasury and all-around Bush family confidante. “We’re in a real pickle,” he says. “We will not be as important on the world scene if we continue to be a tremendously large debtor nation.”
“It’s not so much we’re declining,” Baker continues in the Logan interview, “other countries are coming up.”
China of course, leads the pack.
“China is now the largest holder of US debt,” Logan reports. “It’s also the largest exporter, and within the next five-seven years, it’s expected to surpass the US as the largest manufacturer in the world.”
This story is not remarkable for its content. Rather, it’s interesting because of who’s saying it. Sumner Redstone must be getting nervous himself. Last year, Redstone, chairman of CBS, was crowing that SpongeBob SquarePants was his most successful global brand. Wonder how it’s doing today?