in retreat over past four or five years economically. all these emerging powers we heard about four, five, six, seven, eight years ago, a lot are basket cases. hammered by commodity, oil prices, china is a slowdown. one other point. imagine a crisis with china, two largest holders of american debt, never want chinese to think same way we played off british in suez crisis they can use is as leverage. you don t want chinese banker say maybe diversify some of our dollars or whatever it is. suddenly you cause a bit of a market crisis here. having large amounts of debt leaves you vulnerable to machinations of markets and central bankers. why would we want to do that. samuel, thank you very much for being on the show this morning. coming up, president obama will deliver his fairwell address in his hometown of chicago tonight. we re going to get a preview from one of his closest advisers. valerie jarrett is next on morning joe.
president-elect economic adviser gary cohn. washington post reports he will walk through tax reform. next hour, bring in tax crusader grover norquist actually we will on the meetings and agendas. we ll talk to grover about that. still ahead, former cia director michael hayden. we ll get his reaction to russia hacking report and dig into richard s new book a world in disarray and why it may be death th debt that turns out to be america s achilles heel. that debt only going to explode over the next four years. also valerie jarrett, excited to have our friend. can you believe it s eight years? no. i was just thinking we talked to her before she got in. i was going to say it to valerie but i ll say now. first donald trump is president
seems like it s gone up. close to $20 trillion now. look at proposals by incoming trump administration, i would be shocked if we weren t over $30 trillion if we re on this trajectory over the next four or five years. how dangerous is this for not only the we will being of the united states and american home but also our stranding abroad? i think the question isn t so much the overall level of debt, numbers like $20 trillion and $30 trillion seems scary, question of debt to gdp. u.s. economy has also grown a fair amount during this time. debt to gdp ratios are now approaching 100%. the question is whether this is the right time to engage in even more fiscal stimulus. now, the argument is always if you do that, and if you generate high rates of economic growth and return, then it pays for itself, at least means not as much of an issue. when does that happen? we republicans, i m talking about myself, we said it with
gdp. second largest economy in the world. one of the largest holders in american debt. again it is not that you shouldn t do it. but let s just hope there is actually some thought about this. i was trying to ask kellyanne conway about what is the process this is decided. she says he has access to information but didn t really go into any level of detail. and obviously ivan this comes at relations with china are always fraught. but there is a lot of flash points right now in south china sea and elsewhere that are, you know, very much in the balance. absolutely. south china sea. disagreement between washington and beijing over a huge body of water china claims to be pretty much its own sovereign territory. u.s. needs china s help to deal with north korea. and as some people have pointed out this kind of could potentially raise tensions at a time when you don t really need them with some of these very
disagree. chief washington correspondent james rosen has the story. reporter: when vice president biden visited beijing in early december, china had just capped a month in which it increased its holdings of u.s. treasuries by more than 12 billion, treasury department figures show. those moves helped china, already the largest foreign holder of american debt, reach a total stake worth $1.3 trillion. harder to quantify is whether all this is inhibiting the free exercise of u.s. foreign policy. china has been willing to lend us a lot of money over the last decade. so we are in a sense dependant on them to finance our shortfalls. on the other hand, if they started selling their treasuries on a large scale, the value of the treasuries would decline, and they would have a very large financial loss, so you might think they have got some leverage, but it s really hard to see how they are going to exercise it. reporter: most analysts agree china is using its foreign exchange reserves to m