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| From MarketWatch.com |
Arends states that, "According to the IMF forecast, which was quietly posted on the Fund’s website just two weeks ago, whoever is elected U.S. president next year — Obama? Mitt Romney? Donald Trump? — will be the last to preside over the world’s largest economy."
Attempting to put this in perspective, Arends says., "The rise of China, and the relative decline of America, is the biggest story of our time. You can see its implications everywhere, from shuttered factories in the Midwest to soaring costs of oil and other commodities." He adds, "What the rise of China means for defense, and international affairs, has barely been touched on. The U.S. is now spending gigantic sums — from a beleaguered economy — to try to maintain its place in the sun."
Responding to Arend's article, the IMF said that it disagreed with his analysis of their data and that the U.S. economy “is currently 130% bigger than China, and will still be 70% larger by 2016.” But regardless of the exact time...we're losing ground very quickly.
Stephen Green, however, see the whole thing a little more optimistically and actually calls Arends article "ghoulish." In an article for Pajamas Media, Green points out that while "the yuan is weak because China wants it to be, fueling an export-driving boom that has taken China from a backwater to a major power in 30 years." And that, "the U.S. dollar plummets because nobody in D.C. can implement a policy to make it do anything else — and the resulting inflation threatens us with a double-dip recession." He believes that "America enjoys other strengths China lacks."
Some of the strengths that Green points to are who each country count as friends: China - basically North Korea and Burma. The U.S. - India, Thailand, Vietnam, Indonesia, Australia, the Philippines, Taiwan, South Korea, and Japan. He also points out that China's "economy still suffers from faux-communist distortions. From uninhabited, brand-spanking-new 'ghost cities,' to a financial sector that would make Tim Geithner blush." I recently watched this telling video documentary by SBS Dateline (Australian TV) that shows the ghost cities of China and the obvious results of socialist, centralized planning run amok.
So while China may not be as strong as some might make it out to be, it is rather disheartening that we have allowed ourselves to fall back so badly that we are now being compared in this way with communist China. Socialism never works in the long term...whether it's done in China or in America.
