Trump is worried that the United States is quickly losing its economic power to China, while the country faces debt levels that “no one ever dreamt possible.”
More than once during the 2012 Presidential Campaign Trump claimed that the "US doesn't make anything anymore" well Trump is wrong.
Trump says that China will soon be the biggest economic engine in the world while the U.S. grapples with nearly $17 trillion in debt. Trump’s comments are similar to statements he made last fall during an appearance on Fox News’ “On the Record with Greta Van Susteren.”
China's manufacturing output in 2011 exceeded the USA's output by nearly 24%, yet the rest of world can barely keep out, in fact the combined producting of Eurpoe, Barzil and Korea is still less than the USA.
In that interview, Trump said the United States is no longer a rich country. “When you’re not rich, you have to go out and borrow money. We’re borrowing from the Chinese and others. We’re up to $16 trillion in debt.”
He went on to point out that the downgrade of U.S. debt is inevitable.
“We are going up to $16 trillion [in debt] very soon, and it’s going to be a lot higher than that before he gets finished. When you have [debt] in the $21-$22 trillion, you are talking about a downgrade no matter how you cut it.”
Trump contiues, "In 2016, China will become the big economic factor of the world. That was unthinkable if you think back 10 years from now -- you know, from now, you go back 10 years, it was unthinkable. But China will become the big economic power. 2016, that's right around the corner. And we let that happen. And they've become the economic power on our back!"
This is why The Donald is wrong, first the US Dollar has declined by 30% over the last decade. Not good news you say? Well actually a lower dollar makes US goods priced more competitively in world markets.
Trump is wrong about the US and Oil and Trump is all worked up about OPEC. But the Organization of Petroleum Exporting Countries is of little concern because, US Oil Production has actually increased from 2008 levels and our net imports of oil have drastically declined from a high of nearly 60 % in 2004 to less then 45% in 2011.
Oil is less than 40% of US energy consumption and coal and natural gas prices are a historically low prices.
The bottom line is the US has increased our energy independence over the last decade and will continue to do so.
How many times have you heard Trump say we are losers, we don't make anything? The Donald is right, that iPhone, iPad and flat screen television are not made in the USA.
But we lead the world in, construction equipment, pharmaceuticals, aerospace and defense, energy equipment and services, entertainment, computer and software design.
The truth is that that Made in USA is all over the globe, in fact US exports represent nearly 14% of the US Economy vs back in the good old days of the 1950's when is was less than 6%.
The claim that China owns the US, is nice ploy to scare Americans into thinking we are on the road to ruin.
FOXCONN employs more than 1.2 million Chinese workers who assemble more than 40% of the world's smart phones, computers and other electronic devices. Yet their wage rates increased by 25% in 2012 vs the US which increased by only 1.7%. The fact is you can't stay competitive for long with skyrocketing labor costs.
Plus workers in the USA are substainally more productive than their Asian counterparts. While China's production exceeds the US's it’s important to remember that China’s manufacturing workforce is estimated to be around 100-110 million compared to America’s manufacturing employment of less than 12 million.
In other words, it takes ten Chinese guys to screw in a lightbulb where here in the USA it takes only one.
Finally their is the area of growth, how do you grown an ecomony depends on the resources avaiable. Unlike Europe and many emerging market countries that are tied to just one source the US has far deeper pockets to help develope ideas and products. Our souces Commercial Banks, Venture Capital, Private Equity, The Stock Market, The Bond Market, Life Insurance Companies and Real Estate Investement Trusts, vs one single cental bank.
Bottom line is USA is a considerably better builder of a diverse array of products than most people realize including Mr. Trump and Cedar Posts can back this up with a visual.
Seldom am I on the water in Charleston Habor when I don't pass a container ship and it's easy to notice that those going out are sitting lower in the water than when they came in, meaning they are loaded with goods leaving the USA.
Maybe my perspective is just a little better than Mr. Trump's view from that NYC office tower bearing his name.
No comments:
Post a Comment