AP IMPACT: China overtaking US as global trader

Associated Press ^ | Dec 2, 11:05 AM EST | JOE McDONALD and YOUKYUNG LEE

[NVDave]

a) Demographics: China, South Korea and Japan all have demographic implosions coming.

China will be hurt the least of the bunch, because they have the least in the way of social spending for their aged and the least debt:GDP. Japan is screwed, because they’re running in excess of 230% debt:GDP, and much of their paper is held by their own citizens - who will have to redeem is pretty soon to fund their own retirements and health care needs. At their nearly negligible yields, Japan will probably have trouble peddling the roll on that paper off-shore. Who’s going to buy it?

The US has a demographic problem too, BTW. Ours is actually worse. We have our rampant increase in claimants on Social Security and Medicare, then we have over 50% of all immigrants (over a half-million people) who go onto some form of social welfare every year. We’re being spent into oblivion at both ends of the age range, and on top of that we’re running a trillion dollar deficit, trade deficits and current account deficits. We’re running over a $100B/quarter current account deficit. China runs a current account surplus.

b) You reference the ghost cities China has built. OK, so what? The PRC has so much cash on their books that they could pile up billions of dollars in a pile and set it alight. They’re not in hock to anyone.

We are - to them.

c) OK, so they’re in recession. Right now, that means their growth has fallen from about 10% GDP per year to a bit over 7% GDP growth per year. China does not have negative GDP growth - they’re merely seeing slower GDP growth than in the prior years.

This is a problem the US will never have the luxury of having again - 7% GDP growth.

Now... why is China in such trouble again?

[1rudeboy]

You place tariffs on foreign goods, you do not need income taxes. Worked for our Founding Fathers and the next 150 years or so after that.

Even more amusing is that you wrap yourself in the cloaks of the Founding Fathers in order to raise taxes.

Make no mistake the Constitution sees tariffs as a way to raise revenue. But not as a way to provide full employment at a "fair" wage, or to reduce the need for entitlement spending, or any other flavor of the day.

And frankly the Founding Fathers would laugh in your face if you promised that raising one tax now would reduce the need for another tax later.

So you want to eliminate income taxes and replace the revenue with tariff income? Let's see your plan.