US Stimmy Checks Support Foreign Manufacturing Economies

"All the Chinese get in exchange for their efforts and resources are dollars, which the US creates for free."

What do you get when you hand Americans big fat stimulus checks after decades of offshoring the country’s manufacturing economy?

Massive trade deficits.

The proof is in the numbers.

The overall trade deficit expanded by 87% in February to $71.1 billion, according to the latest Census Bureau data.

The trade deficit in goods hit another all-time record of $88 billion in February. Imports of goods jumped 10.3% year-on-year $219 billion. Exports of goods sagged 5.2% to $131 billion.

In the past, we were told the persistent drop in exported US goods was not a big problem because we can make up for it by exporting services. It hasn’t worked out that way. While the US still runs a trade surplus in services, the number is shrinking. The surplus of services in February plunged 24.4% to $16.9 billion. That was the lowest level since 2012. In fact, we’ve seen a steady deterioration of the services surplus since 2018.

As WolfStreet explains, the US has increasingly offshored its entire economy.

During the Financial Crisis, the goods trade deficit shrank substantially, as consumers cut back buying imported stuff, while the trade surplus of services dipped only briefly and the overall trade deficit shrank substantially. But instead of reversing the course of the prior two decades of ballooning trade deficits, Corporate America went into hyperdrive during the Financial Crisis to offshore not only production, but also the design work that went along with it.”

Today, virtually all of the durable goods sold in the US are imported – from smartphones, to appliances, to clothing. And many of the products assembled in the US are made from imported parts. WolfStreet says we’ve established a pattern.

After decades of rampant offshoring of production, US consumers get free stimulus money in the hopes that they will turn this taxpayer money – or rather future taxpayers’ money since this is borrowed money and will have to be dealt with by future taxpayers for all times to come – into a big-fat stimulus for the manufacturing economies in other countries.”

This mirrors what Peter Schiff has been saying.

The government, or the Federal Reserve, is printing money and just giving it to unemployed people who aren’t making stuff, but they’re spending money. And so what they’re doing is they’re buying the stuff that people in other countries are employed making. So, it’s the productivity of the rest of the world that Americans are living off of, and the trade deficit evidences that and shows you that our whole economy, our whole recovery, is a fraud.”

Peter said this shows you just how much the US economy has declined.

At this point, we’re just living off the charity of the rest of the world and there’s a limit to the amount of charity, and I think we’re going to be testing those limits soon.”

What we’re seeing is entirely predictable. When you had a bunch of people who aren’t producing anything but big fat checks, they’re going to spend the money on goods that come from places where people are working. In effect, the US government is supporting the manufacturing economies of China and other countries. As Peter put it, China gives the US valuable consumer goods that our economy lacks the capacity to produce. All the Chinese get in exchange for their efforts and resources are dollars, which the US creates for free.

This is clearly not sustainable. What happens when the Chinese decide they have enough dollars? And that day may not be far down the road.

Source: Schiff Gold

  1. ken says

    Hate to say it but we Americans are the leeches of the world. We produce nothing of value. Only our weapons sell but that cannot be counted as weapons destroy things and even as I type those weapons are selling less and less as the US is not the lead nation for weapons technology today.

    Even when the US went to the moon,,, produced quality jet aircraft and other tech, it was the Germans that were brought over from nazi Germany after the war,,, Von Braun and company that led the US scientists.

    Today our woke universities are churning out morons with woke degrees that are useless. The generation with the knowledge has retired and most have passed on. The knowledge they had died with them as many were not woke enough to teach at the universities.

    Because of this total failure in the education system, the universities blame White Supremacy by claiming that physics, math, language, etc are racist. All this does is reduce the hard sciences even more. Now we are importing ‘educated’ people from countries that gained what little knowledge they have from the West in the hopes of keeping up with the two countries that are now graduating true scientists,,, Russia and China and of course they are both considered our enemy.

    This comment won’t be popular but unless we somehow change the nations trajectory,,, it’s over for us.

    1. Jian Hong says

      It only won’t be popular with brainwashed Americunts who still think USA is “exceptional”. The same imbeciles who cry about “cheap Chinese crap” while the very device they type on is either completely made or have parts of if made in China. They wouldn’t even recognize the name of von Braun, especially not Qian Xuesen.

      Barely anything is Made In USA anymore, and the few things that still are, those companies piss me off with their “proudly made in USA, superior quality!” rhetoric. I’ve seen so much of it fail or break apart quickly and of course with an typically overpriced tag.

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