The Chinese appear to have a more realistic view of our debt crisis than Congress.

From AFP:

A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order.

"In our opinion, the United States has already been defaulting," Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.

Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies -- eroding the wealth of creditors including China, Guan said.

Guan did not immediately respond to AFP requests for comment.

The US government will run out of room to spend more on August 2 unless Congress bumps up the borrowing limit beyond $14.29 trillion -- but Republicans are refusing to support such a move until a deficit cutting deal is reached.

Ratings agency Fitch on Wednesday joined Moody's and Standard & Poor's to warn the United States could lose its first-class credit rating if it fails to raise its debt ceiling to avoid defaulting on loans.

Classic bait and switch; we are paying off our debt by using devalued dollars. The Chinese don't like it and a failure to raise the debt ceiling may cause them to take drastic action.

That might be the only way to goose congress to get our fiscal house in order. It looks like it will be up to the GOP since the Democrats are in no hurry to bear some of the political pain that will ensue when those dependent on government find their benefits reduced or eliminated. They will continue with Mediscare and other demogoguing tactics while not offering a single idea on how to get us out of this mess that was largely created by their own party leader - the president.