“They should be more concerned than we are,” Paulson said of China’s substantial US Dollar holdings.
The former Treasury Secretary explained that he is “concerned about the amount of debt that we [the United States] have, not the fact that China is a creditor.”
As of February 2015, China was the United States’ second largest creditor behind Japan and held $1.22 trillion in US Treasury securities, according to the US Treasury Department.
Paulson emphasized that addressing the US deficit problem is “hugely important” for the United States, “if we want to continue being a superpower years into the future.”
During his tenure as US Treasury Secretary, Paulson oversaw the $700 billion government bailout of the largest Wall Street financial institutions at the height of the 2008 financial crisis.
In March 2015, the US debt reached $18.1 trillion, according to the Treasury Department. The United States is expected to pay its creditors more than $160 billion in interest on the debt in 2015.
