Mainland China is not bullish on the U.S. Economy. China’s U.S. Treasury holdings have generally declined since 2013 from a peak of approximately $1.32 Trillion (Nov-2013) to $1.07 Trillion as of Jul-2020.
Charts and graphs are at the article’s end
Both the U.S. and China have interventionist fiscal and monetary policy. The difference is that China’s economy is growing, powered by a strong manufacturing base and augmented by a growing services sector (Technology, business services, financial services, etc). Contrast China with the U.S. Economy. The latter has lost its manufacturing base, is in a slow state of decline, is hampered by onerous regulation, saddled with exorbitant debt levels and punitive taxes. The U.S. has a robust Technology sector, yet it is not large enough to drag along the rest of the economy.
The solution to repairing the U.S. Economy is not propping it up by issuing more debt. The solution is not weakening the U.S. Dollar in the hopes of lowering the cost of labor. The solution is not maintaining near zero interest rates in order to minimize debt service expense. The answer to helping a weak economy is never to issue more debt. Financial trickery is not a solution. It is fraud. We must do the hard work.
What Is The “Hard Work”?
- Shrink Government:
- Eliminate corporate and social welfare programs and any program that does not generate a measurable ROI.
- Remove regulations that reward government employees, government institutions and commercial incumbents at the expense of innovation and the American consumer.
- States should allow charter schools without limitation.
- The Federal government ought to abstain from interfering in Education entirely, especially with intrusive, heavy-handed programs like CORE.
- Replace State and Federal income taxes with a pay-as-you-go Sales tax on goods and services. Eliminate all tax loopholes.
- Eliminate redundant taxes such as estate and death taxes.
- Eliminate any program that seeks to achieve equality of outcome.
- Encourage / incentivize the private sector to engage in K-12 education, particularly as it relates to shaping curriculum in Mathematics, Science, Engineering, Technology.
- Fiscal and Monetary policy ought to abstain from manipulation of the Economy and Markets.
- Fiscal policy should always run a surplus.
- Monetary policy should allow rates to float. The Monetary side should only act in a time of crisis. A crisis is defined as a point in time when credit markets seize (the 2008 credit crunch and the March 2020 credit crunch as recent examples).
Follow this recipe and the U.S. Economy will flourish.
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