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Ask Dave

Did China Bail Us Out?

One listener wants to know where the money for the massive government bailout came from.

QUESTION: Listener asks where the government got the bailout money from. Do they print it or borrow it from China? Dave breaks it down for him.

ANSWER: None of the above. When the government spends more than they make, that money is borrowed by them selling U.S. government bonds, called treasury bonds, on the open market. China does own some of those bonds, but certainly not all of them. They also did not lend us money on a direct loan to do our bailout. Treasury bonds are one of the safest investments on the planet.