The headlines should read: World Didn’t End! Sub-head: We didn’t know what we were talking about.

The data for official Chinese purchases of Treasury bonds in 2009 were published yesterday. Verdict: the PRC bought practically nothing. In 2008, official Chinese purchases of US Treasury bonds were equal in size to half our federal budget deficit. Last year they were equal to 2%. That’s not a typo, that’s a ‘2’.

According to the “China is our banker!” hysteria, our interest rates should be soaring. Of course, they aren’t.

The whole idea of China’s financial grip over us is a fiction, and has been from the beginning.

Yes, there is a huge issue here. But it’s us, not China. We’re mortgaging our future because the President and Congress want a government hand in every aspect of business. We can finance our huge deficit without too much trouble, and in 10 years we’ll be very sorry that we could.

China’s purchases of our bonds are not important and never have been. What matters is our elected officials are acting to ruin the economy. Fix our problems first and worry about China second.