There is understandable alarm about the ballooning size of the U.S. debt and the fact that so much of it is held by foreigners, especially the Chinese. Joe Nye of Harvard, who has been consistently right in refuting theories of American decline for years, suggests that China’s position is not as strong as it appears:

The fact China holds so many dollars is not a true source of power, as the interdependence in the economic relationship is symmetrical. True, if China dumped its dollars on world markets, it could bring the U.S. economy to its knees, but in doing so it would bring itself to its ankles. China would not only lose the value of its dollar reserves, but would suffer major unemployment.

I’m not an economist, but it’s an argument I’ve heard echoed by economists. If accurate, that suggests that we have less to worry about from debt being held in Chinese hands than some alarmists imagine. It also means, as I have argued before, that America’s decline and fall are not imminent.