New York Senator and presidential candidate Hillary Clinton told CNBC that this week's market turmoil "should be a real wake-up call for our country" on its foreign debt and fiscal policy.
Clinton, appearing on "Power Lunch," said that the level of "our public debt that is now held by central banks and foreign governments is a problem, and I don't want the administration to ignore this wakeup call and just hit the snooze button again. We've got to get serious about our own fiscal house."
Clinton said that issues like protecting intellectual property and pushing for good contractural agreements are made more difficult "if we are dependent on governments like China to continue to buy our debt." She said we are "losing our leverage to make the sort of changes we need to do."
Clinton made her coments after sending a letter to Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, expressing her concern over the level of foreign ownership of U.S. debt. Currently, some $2.2 trillion, or 44% of U.S. debt is held by foreigners, about $1 trillion of which is owned by Japan and China.
When asked about Bernanke's comment yesterday on Capitol Hill about there being little chance of foreign governments selling U.S. debt, Clinton said "why take the chance?"
She also said that she doesn't want the U.S. to be so dependent on foreign governments when it comes to fiscal policy. She said the U.S. should do more "investing in itself."
Clinton, a declared candidate for the Democratic presidential nomination, also said she was not in favor of any legislation that would limit the amount of debt held in other countries. But she said she wants to be more "realistic" about some of the downsides of such holdings.