Economic statistics might seem a dry topic, but it’s actually full of colorful anecdotes. We hear a lot, for example, about how hard it is to gauge what’s going on in the ever-important Chinese economy because economic reality and the numbers to support it are basically made up by Beijing. Well, not totally made up, but if the government says that China will grow by 8 percent a year, you can safely bet that the national statistics bureau will release figures showing just that in December.

But the same is true to some extent in the U.S. “American economic figures can be just as bad as China’s,” says East-West fellow and economist Christopher McNally, “we’re just not as open about it.” For example, there’s an economic indicator known as “M3” which is a measure of how much debt is being created in the economy. The European Central Bank, ever worried about rising inflation and a new Weimar Republic, still tracks it carefully. But the U.S. Federal Reserve stopped tallying M3 back during the late Greenspan years – a copy of Robert Shiller’s “Irrational Exuberance” goes to the first reader who can guess why.

The same hi-jinks go into inflation figures, which are tweaked by each successive administration to look more attractive. McNally notes that back in the 80s, when the price of oranges (which were included in the inflation tally) went up, government officials neatly solved the problem by substituting apples. Our current inflation tally still pegs the price of a TV to ten-year old models, when everyone is buying more expensive flat screens.

The real difference here is that the Chinese government has the power to tweak not just numbers, but reality. Of the 3,300 individuals in China who are worth more than $60 million, 2,900 have relatives high up in the Communist Party. In China, when the government asks a roomful of bankers who wants to lend money, everyone raises their hands. In the U.S., despite our semi-nationalization of the financial industry, economic reality remains a lot less clear.

My column earlier this week discussed the dangers of the rising federal debt, as envisioned by President Obama's proposed budgets. The numbers, in case you've forgotten them, are staggering. From 2010 to 2019, Obama projects $7.1 trillion of new debt; that's on top of the $1.8 trillion for 2009. By 2019, federal debt would reach 70 percent of Gross Domestic Product, up from 41 percent in 2008. The Congressional Budget Office, with a slightly less optimstic economic forecast than Obama, puts the numbers even higher: $9.3 trillion in new debt from 2010 to 2019 (also on top of 2009's $1.8 trillion); in 2019, the debt to GDP ratio would be 82 percent.

G. William Hoagland, the long-time (1985-2002) Republican staff director of the Senate Budget Committee, sent me a recent paper providing the useful reminder that the growing debt has increasingly global ramifications. According to Hoagland, 53 percent of all Treasury debt is now held by foreign investors and, more surprisingly, 78 percent of the recent increase in debt has been purchased by foreigners (the actual period covered is from 2001 to June of 2008). Hoagland draws two conclusions.

The first involves the burden of debt. "When public debt is held primarily by a country's domestic investors," he notes, "interest payments on that debt essentially [are] a redistribution of income and assets within the domestic economy. However as our debt increasingly is held by foreign investors, then payments on interest and principle involve actual costs to the domestic economy rather than redistribution."

The second--and more important--implication is the potential for a future financial and economic crisis. "If we ever reach a point where our debt level causes those foreign investors to quickly look elsewhere, even their own back yard, then I think the current [financial] crisis will pale by comparison," he writes. Foreigners would stop buying the debt or even sell some of what they have. The dollar's exchange rate might plunge; U.S. interest rates could rise sharply. "I pray we never see that day," says Hoagland. Amen.

Think You See Green Shoots? You're Wrong: Nouriel Roubini, aka Dr. Doom, must have some strange biological or neurochemical processes in place that give him pleasure for undercutting optimists. Of course, he's often right, and he expects the recession to continue through the end of the year.

Asia Needs to Ditch Its Growth Model: Or so says Michael Pettis, finance professort at Peking University (and also regular contributor to Newsweek). China and other export-dependent countries simply can't depend on the West to buy up its cheap socks and stereos any more.

Is California Too Big to Fail?: Megan McArdle says no, we should let them go bankrupt, and bankrupt they will go, because "California is completely, totally, irreparably hosed." Blame all those spending initiatives.

Don't Let the Glitter Hypnotize You: Gold bugs say we're in for an era of inflation, and the only safe place to stash your money is in gold. Daniel Indiviglio thinks that's idiotic.