On CNBC, China observer Stephen Roach argued that the US needs to heed the warnings of China, because the US can't fund its own debt domestically because it doesn't save.

This is just not true.

This chart shows the total net worth of households and non-profits in the US. It's basically the private sector's "book value" and it currently stands close to $60 trillion, far bigger than US government's debt.

Even if there were no foreign buyers of US debt -- a ludicrous idea, so long as foreigners run a trade surplus with the US that must be recycled -- the US has plenty of domestic savings.

This idea that we have to go begging to China to keep the government open is nothing more than dangerous nonsense that feeds into fears, stoking misguided political agendas.