Argument: US debt to foreign governments is problematic
- Resolved: That eliminating United States government budget deficits should be prioritized over increasing domestic spending
According to the US Treasury, 44% of the US public debt is held by foreign countries. Fears related to the "twin deficits" of a US trade deficit in combination with a budget deficit has caused a number of governments to fear an "expected slide in the dollar", and has encouraged them to sell their dollar assets. While the debt held by Japan reached a maximum in August of 2004, it has fallen nearly 3% since then. August 3rd, 2006, Italy's central bank announced that it would sell a large portion of its dollar holdings (including US Treasury bonds), shifting to the more stable British Pound Sterling. Russia, Sweden, and the United Arab Emirates had announced similar shifts out of the dollar into other currencies and into gold as well.