China would likely win a trade war with the US if Washington decides to exert regulatory pressure on the world’s second-largest economy, top US China expert Nicholas Lardy said at a panel discussion in New York on Tuesday.
Lardy, senior fellow at the Peterson Institute for International Economics, was quoted by UPI as saying that the Chinese are better poised to counter the fallout that would result from such an economic clash.
He explained that trade deficits arise for more complicated reasons, and the Trump administration is simplifying the issue in blaming foreign governments, including China’s.
“The only way to deal with a trade deficit is raise savings and investment rates,” Lardy said, referring to the reason deficits occur. In other words, Americans are consuming and spending more than they produce.
Recent US tax reform is harmful, the China expert added.
“Repeal tax reform,” he said. “Because the tax reform is going to make the US global trade and current account deficit go up.”
Tax reform is also designed to raise interest rates.”There’ll be capital inflow, and the trade deficit will be going up,” Lardy said. “I think it’s almost inevitable.”
“It reflects a fundamental flaw in understanding how the political economy works.”
Galen Linder
the only "money" in a Credit card transaction is the money we give them. but here is the problem. the ease of using Credit cards increases the likelihood of defaulting on payments. the moment that happens one cannot get loans for anything else especially in buying a house.
By 1980 all regulations on Credit card interest was removed. That is hyper "usury" and America being a Christian based nation usury still remains a sin.
Too dumb to comment. Arfe you from a shithole country?
All the complaining is just a ruse and old habits. The most important issue for US is the status of dollar as world reserve currency.
In the US, most "jobs" don’t produce anything. It is all neoliberal shuffling of money. Costs show up on the national leger the same as production. There is a bloated financial capitalist bureaucracy which consumes up the wealth of people who produce. Just ask people if they produce anything on their jobs. A billion dollars of lawyers fees shows up on the books the same as a billion dollars in wages to factory workers. It is insane. Drive around a US city and try to find a factory which makes anything. Good luck on that. And when you stop for fast food, recognize that the low paid worker who hands you your food actually produced it, but the parasites she works for takes most of the value.
Also, the US trades trash to China for all the goods people pick up at the Wal-mart in exchange for green pieces of paper or bytes on a bank’s hard drive. Trash is by far on of the, if not the, biggest export to China by weight.
Galen Linder
Shhhhhhhh you should know better than try and explain facts to an American they have their own facts………….er ftiction that they believe in. I Ihink most of them still truly believe in the Tooth Fairy and Santa Claus, and that Jesus will come and save them in the event of a nuclear holocaust.
An Indian from Vancouver had it about right. He said " only a white man would cut a foot off the bottom of a blanket and sew it back on the top of the same blanket and think he had a longer blanket."
Please study the causes and consequences of the 2008 financial crisis. Which country’s financial system created it, and which handled it better. Please note that real wages in the US have declined and China’s have doubled sinse 2009.
A modern society needs a credit system, but under finance capitalism, it has been captured by what used to be called loan sharks. Remember that the banks which issue credit cards are not acturally making loans of existing money. Rather, they are creating money by issuing credit. We need a system of publicly owned banks to create credit. The level of lending and the rate of interest can be determined by the needs of the economy.
Oh yeah, I bet China would win a trade war.
It would be easy, just stop trading with the US, stop building their appliances and ride on mowers.
Yup sure. Go right ahead.
My hunch is that the other eager Asian Tigers would fill the gap in a few years.
But you go ahead Chinese dictatorship, shut your factories, send your billions home without money or food.
Go right ahead. They don’t want cars or tech or bridges or electricity.
Psst…. maybe you’d better go to the US and buy a secure building and hide there, because there will be a few million, or maybe tens of millions, of very angry Chinese out to beat on your skinny back.
"In other words, Americans are consuming and spending more than they produce"
That quote sums up our weakest point. Americans live on borrowed money, borrowed money with an extaordinary high interest rate. Each credit card purchase is a high interest loan with fees and penalties attached to it. It probably is the worst kind of loan one can get. Outside of the fact that almost anyone qualifies and Credit card companies go out of their way to lure customers to spend, it is almost impossible to pay off credit card debt when it gets too high and other debt is present.
We are a debt oriented society. But this is rediculous. If I wanted to buy a TV and needed to borrow the money, it would be foolish of me to get a 23% loan just to buy that TV. Most likely I would save the money and then buy that TV.
Credit cards bypass this logical step. Our Credit card debt is around 1.2 Trillion dollars.