When will somebody admit we have no choice but to stiff them?

Mark, you describe China as a "weak power," but isn't that oxymoronic. On second thought, maybe "weak power" is like "paper tiger," with the noun describing the reputation while the adjective reveals the truth.

I believe another way to put that is second rank power.
They have power, but they are not the uncontested master of the areas they want to control.

Remember how Brazil had the large banks over a barrel in the eighties?

What did their finance minister say? "When you owe a bank $1 million you are in trouble, when you owe a bank $1 billion, the bank is in trouble" or something to that effect. My, how the decimals have grown.

There's an old saying.
When you owe the bank $1000, the bank owns you.
When you owe the bank $1,000,000, you own the bank.

On the other hand there's the old saying about if you owe the bank $1000, you're in trouble, but if you owe the bank $1,000,000, the bank's in trouble.

China holds $1 trillion in U.S. bonds. They'd better be careful they don't do something that makes us mad enough to default.

Since we're still borrowing a huge percentage of what we're spending for the foreseeable future, what if China just decides to punish us by dumping our bonds on the market? If the price of our 10year $1,000 bonds goes down from $980 to $700 (a 30% yield) because China is dumping them on the marketplace, we won't be able to sell our newly issued bonds for more than $700, and then the panic accelerates as other bondholders decide that they have to 'get out' before the bottom falls out, and the price plummets even more - are you going to pay $980 for that bond when the seller's selling them everywhere for $700? Yeah, me either. So then how do we pay the 30% interest? If we do pay the huge interest, there won't be money for much else (military, social security, etc), and we'll be circling the drain at a rapid clip. It'll be a complete meltdown, and it won't hurt the Chinese nearly as much as it will hurt us.

I suppose that the PRC could exercise financial pressure on the U.S.: Do what we say or we'll sell all our U.S. bonds - but as a substantive matter, don't we continually deal with limits on our power?

In the early and mid-1970s we chose to end our involvement in the Vietnam War and to watch North Vietnam conquer South Vietnam. There are all sorts of reasons why we made these choices, but the bottom line is that we made them because there was a limit to what we were willing and able to do to assist the South Vietnamese in remaining independent.

Regardless of whether we send Taiwan some arms or money on occasion, we abandoned the Taiwanese in the mid-1970s. Remember, we didn't decide to recognize the PRC as the government of mainland China while recognizing the nationalists as the government of Taiwan (which is precisely what the current situation is) - we replaced the PRC with the nationalists as the government of both places - a patently silly and Alice-in-Wonderland decision. And we continually maintain this bizarre posture of saying that the PRC can't exercise sovereignty over an island that, we say, is part of what it has sovereignty over.

Iran has acted against the U.S. since 1979 and has for the last dozen-or-so years tried to develop nuclear weapons that would inhibit our willingness to use force against it. No President - not Carter, not Reagan, either Bush, Clinton or Obama - has dared to try to stop Iran from doing what Iran wanted to do. The sense I get from Obama re Iran is precisely the same sense I got from GW Bush - we have no idea what to do and the Iranians scare us silly.

And of course, Mr. Castro in Cuba has bedeviled us through 11 Administrations and our continual response has been to call him names and to maintain an ineffective boycott of the place.

We always have limits on our power, even if we don't openly recognize those limits. A Suez incident is humiliating not because it happens but rather because the country sticks its neck out too far rather than properly evaluating its chances of success ahead-of-time.

Newrouter:

Of what possible significance is is to my point - that "we chose" to end our involvement in the Vietnam War and to watch North Vietnam conquer South Vietnam - that the decision was officially made by a Congress in which both Houses were controlled by Democrats?

The Congresses and Presidents who authorized, supervised and funded - and who then ended, supervised the end of and de-funded - American involvement in the Vietnam War were freely elected by the American people (at least those Americans who were born prior to about 1957).

No one was nominated by either party for the Presidency after 1972 on a platform of re-engaging the U.S. in the war or using American military force to reverse the gains made by the Communists in Laos, Cambodia and Vietnam. And certainly no one won an election on such a platform. The Democrats comfortably retained control of Congress in 1976 even after the implications of the decisions of 1973-75 became clear. Ronald Reagan certainly didn't campaign in 1980 on a platform of "freeing" Southeast Asia.

So yes (putting aside the age issue, since I certainly had no say in the matter): We chose. You may not like what "we chose" - just as I occasionally don't like what "we choose". But "we chose" all the same.