U.S. debt

China's economy, the turbocharged engine of world growth, is starting to sputter. From a competitive standpoint, that may feel like good news, but what happens in Beijing doesn't stay in Beijing: The U.S. economy is inextricably linked to China's.

One of this country's biggest economic problems is a tsunami of misinformation. You can't have a rational debate when facts are so easily supplanted by overreaching statements and errors. Here are three misconceptions about our economy that need to be laid to rest.

Last week, Warren Buffett wrote an incredible opinion piece in The New York Times asking the government to raise taxes on the wealthiest Americans, himself included. "My friends and I have been coddled long enough by a billionaire-friendly Congress," he argued, and he's not alone in that view.

It's true that the U.S. has racked up the largest debt of any developed country. But when you consider the debt in relation to the country's gross domestic product, it's only No. 7 on the list, according to Fortune. Here's what you need to know to make sense of all the numbers.

Standard & Poor's downgraded the U.S. debt rating for the first time on Friday. Coming on top of concerns of a second recession, the move has investors worried that we're headed into a bear market for stocks. Here's what that would look like.

Fear is in the air on Wall Street. Unemployment is high, housing sales are sluggish and the dollar is weak. Now, to add insult to injury, Standard & Poor's has lowered its U.S. debt outlook to negative, putting the nation's AAA credit rating at risk. Fortunately, smart traders can benefit from these worries.

Analysts lately have loudly proclaimed the end of the dollar, leaving investors looking to stay ahead with a choice of betting on stocks, which have 17% fallen in the last decade, or staying "safe" in very low-yield money market funds. But there is an alternative: commodities.

Investors received another sign Friday that the U.S. economy is continuing to heal: The 2010 U.S. budget deficit came in at a smaller-than-predicted $1.29 trillion. Though it was still the second-highest deficit on record, the numbers reflect growth in tax revenues, and thus in the economy.

Global appetite for U.S. financial assets slowed markedly in December, and demand for federal debt fell by a record amount as China dumped more than $34 billion in American IOUs, the Treasury said Tuesday. China cut its holdings for a second straight month.

China owns, by most accounts, the largest pool of U.S. Treasuries in the world. It continues to buy them, helping the U.S. to fund its growing deficit. If China exits the market as a buyer, the interest rate that the U.S. has to pay for its debt would rise substantially. Hillary Clinton is hoping...