AP has some.
A number of misconceptions are shown in their article carried by Fox News. They begin with this:
China is responsible for just a shade over 7% of [US’] total debt. And while it remains the single largest foreign lender (just ahead of Japan), China’s been slowly trimming its holdings, down from nearly 10% a few years ago. Overall, all foreign investors—including national central banks—account for roughly one third of the total outstanding federal government debt.
Never mind that there’s a reason the SEC requires those who acquire 5% of the shares of a company to file public documents identifying that acquisition. That’s enough to start exerting significant influence over the company’s behavior.
Then the AP writes this misconception:
The national debt will soon be front-and-center again…with an expected new Obama administration request to increase the government’s borrowing authority, the legislatively set debt ceiling. The higher limit would not authorize borrowing for new spending but just enables the government to pay all the bills already racked up.
This is, at best, a naïve reading of the present administration’s demand to continue borrowing. It’s the House of Representatives that is so loathe to raise the borrowing limit without an offsetting reduction in actual spending. President Barack Obama repeatedly disparages that body for insisting on reducing spending: he wants to borrow more so he can spend more, not so he can simply “pay all the bills already racked up.” Those already racked up bills are the result of his past five years’ spendthrifting. And of similar overspending by prior administrations.
US politicians see the mountain of debt, but investors globally view US Treasury securities as among the world’s safest financial havens, reflected in part by their current super-low yields.
There are two misconceptions in this single sentence: 1) for how much longer, as our debt continues to grow out of control, will those global investors view our Treasury securities as safe? How safe do those global investors see Greek debt as being? Cypriot debt? Spanish debt? Etc? 2) Those “super-low yields” aren’t market rates, they’re artificially suppressed rates capped by Fed intervention in the market. For how long will those global investors be satisfied with such poor returns on their investments?
And this quote from Nicholas Lardy, a Senior Fellow at the Peterson Institute for International Economics:
There’s a huge misconception here. The guy on the street thinks that we’re up to our ears in indebtedness to China. And it is a large absolute amount. But the public holds a lot more….
We are up to our ears in indebtedness to China. That we’re even more irresponsibly in debt to ourselves doesn’t at all mitigate that simple fact.
Social Security holds $2.7 trillion of the debt in its trust fund, in the form of special unmarketable Treasury bonds. The Federal Reserve holds a $1.7 trillion portfolio of Treasury notes and bonds, much of it accumulated over the past four years with its heavy purchase of US securities to stimulate the economy and hold down interest rates.
This is simply a description of one contributory factor in Social Security’s impending failure: that’s a debt that cannot be repaid—at any price, marketable or not—given our present, much less our growing, unsustainable overall debt. Notice, also that market manipulation of interest rates—the avowed purpose of the purchases.