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In an ad from American Crossroads, Clint Eastwood tells the country it "just couldn’t survive" another four years of President Barack Obama: "We borrow $4 billion every single day, much of it from China," he says.
The message, part of a $12.6 million ad barrage, is running in seven states, including Florida, New Hampshire, Ohio and Virginia.
Images of unemployed workers and foreign-marked shipping containers accompany Eastwood’s gravelly narration:
In the last few years, America's been knocked down. Twenty-three million people can't find full-time work, and we borrow $4 billion every single day, much of it from China. When someone doesn't get the job done, you've got to hold them accountable. Obama's second term would be a rerun of the first, and our country just couldn't survive that. We need someone who could turn it around fast, and that man is Mitt Romney. There's not much time left, and the future of our country is at stake.
It’s been more than a year since we’ve checked similar claims that the country borrows $4 billion a day — something we found Mostly True. We wondered: Is that still the case? And do we borrow "much of it" from China?
We asked American Crossroads spokesman Jonathan Collegio for evidence for the ad’s claim.
"I'm going to let you take a crack at that and get back to me," he said.
We sent him a brief roundup of what we had found so far. We didn’t hear back.
How much we borrow
The federal government doesn’t literally borrow money every day, but through periodic bond auctions. So we assumed the ad used an average.
Here’s one way to do the math on $4 billion a day.
The total federal debt on the day the ad was released, according to the Treasury Department, was $16.2 trillion. On the day Obama took office, it was $10.6 trillion. That’s a gain of $5.6 trillion — about $4 billion a day.
There are a few nits to pick with this math. First, we’re not currently borrowing that much. Over the last year, the average has been about $3.4 billion a day, not $4 billion.
Second, that’s using a measure of the entire federal debt — including the big chunk we owe ourselves that’s held by government accounts such as the Social Security and Medicare trust funds.
"Debt held by the public" is the the amount the federal government has actually borrowed to finance deficits. And the amount added to the public debt since Obama took office averages about $3.7 billion a day, not $4 billion.
Still, this part of the claim is pretty close.
‘Much of it from China’
Then there’s the part about China. This is where the ad’s claim gets goofy.
If we assume Eastwood’s talking about what’s been added to the entire federal debt since Obama took office — the amount that averages $4 billion a day — here’s how much as of August China owns: 7.7 percent.
If someone told you that there were two pieces to our recent debt, one piece under 8 percent and one piece above 92 percent, then asked you which of those pieces represented "much of it," what would you say? We’re guessing the non-Chinese piece.
Still, China is the No. 1 foreign holder of U.S. Treasury securities. (About a third of our total debt is held by foreigners.)
So the main concern about U.S. public debt held by foreigners is mainly what might happen if they all stopped buying. It could drive up U.S. interest rates, said Wayne Morrison, a specialist in Asian trade and finance for the nonpartisan Congressional Research Service.
Does that give China some sort of leverage? Or what if they sold off their U.S. securities all at once, sparking some kind of financial crisis?
"Many economists argue that such a move is highly unlikely," Morrison told PolitiFact.
If China tried a big selloff, it would drive up supply of U.S. Treasuries and drive down their value — tanking the value of China’s own holdings.
Eastwood, speaking in a recent American Crossroads ad, warns that, "We borrow $4 billion every single day, much of it from China." That amount is the rough daily average of all U.S. debt added since Obama took office, including the type the government owes itself. It’s not the current rate, which has been somewhat lower. And while China is the No. 1 foreign holder of U.S. securities, it purchased less than 10 percent of that debt. This claim is only partly accurate. We rate it Half True.
Center for Public Integrity, Daily Disclosure, Oct. 25, 2012
American Crossroads, "At Stake," Oct. 24, 2012
American Crossroads, "New $12.6m Barrage by American Crossroads Slams President in Seven States – One New Ad Features Clint Eastwood," Oct. 24, 2012
Email interview with Jonathan Collegio, Oct. 25, 2012
Email interview with Wayne Morrison, specialist in Asian trade and finance, Congressional Research Service, Oct. 26, 2012
Email interview with Kara Alaimo, spokeswoman, Treasury Department, Oct. 26, 2012
Treasury Department, "The Debt to the Penny and Who Holds It," accessed Oct. 26, 2011
Treasury Department, "Major Foreign Holders of Treasury Securities," Oct. 16, 2012
Treasury Department, "Major Foreign Holders of Treasury Securities(2011 revised)," Sept. 18, 2012
TreasuryDirect, "Frequently Asked Questions about the Public Debt," accessed Oct. 26, 2012
Financial Management Service, "Treasury Bulletin," Sept. 2012
Government Accountability Office, Federal Debt Basics, accessed Oct. 26, 2012
Government Accountability Office, "Ownership of Federal Debt: What are recent trends in the ownership of federal debt?" accessed Oct. 26, 2012
Bloomberg, "China’s U.S. Debt Holdings Aren’t Threat, Pentagon Says," Sept. 10, 2012
PolitiFact Florida, "Sen. Marco Rubio says leaders borrowing $4 billion a day to grow government," April 15, 2011
PolitiFact Georgia, "Senators ring alarm about '$4 billion' daily debt," April 11, 2011
PolitiFact Florida, "Rep. Allen West says China holds 29 percent of U.S. debt," June 14, 2011
PolitiFact, "Herman Cain says China holds 26 percent of U.S. debt," April 22, 2011
PolitiFact, "Michele Bachmann says U.S. will soon send enough interest to China to pay for their military," Nov. 10, 2011
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