I Think I Am Working For The Chinese
February 19th, 2008
Submitted By: Jesse Bilsten
Ignore the fact that there are 1,321,851,888 Chinese and only 301,139,947 of us and come up with some sort of average and according to the trade deficit with China an average American owes an average Chinese $4,000. Add that to the $30,000 that we owe in our share of the national debt and each of us owes at least $34,000 to the global community we’re borrowing against after we get out of college. Of course that was back when I was putting together this article and over the weeks of reading more articles we’re now somewhere around $79,000 that each tax payer owes. Plus we’re getting back another $600 in tax refunds. Of which we’d think would come from a tax surplus. We’d be wrong. The rebate will be another $150 billion that we’ll be borrowing from other countries. The largest of which is China.
Whether we like it or not we’re economically linked with China. So much so that they can’t pull their money out of our economy without taking more losses than they incur by leaving it in. Yet the dollar continues to lose value and the global community is abandoning it as fast as a sinking ship.
Is there anything we can do as young entrepreneur’s and business people to fix this problem? What are our responsibilities? As Americans? As business people? Are any options ethical? Maybe we only deal in Euros? Saudi Arabi, China, South Korea, Venezuela, etc. are all thinking along these lines. Iran recently requested that it’s shipments to Japan be traded for yen instead of dollars.
Entry Filed under: Pre-Departure, Beijing, China
8 Comments Add your own
1. Sin-Yaw Wang | February 20th, 2008 at 1:31 pm
Good one. He should get an A for this.
2. Simeon Trieu | February 20th, 2008 at 7:20 pm
I’m not too familiar with the subject, other than what Dr. Bardhan talked about. However, I don’t think we can reverse this issue very easily. There is too much inertia from deficit spending. One of the linked articles even said this has been our fiscal policy since the American revolution. We can’t expect instant change. One thing we can do is to stop spending where it’s not necessary. We don’t need to fight a war when our healthcare is in serious need of reform. I don’t spend money that I don’t have. I pay off every credit card in full. I budget properly so I do have enough funds for today and the future. Why can’t my government do the same thing?
3. Jesse Bilsten | February 20th, 2008 at 10:22 pm
If all this isn’t enough to scare you silly, our banks are borrowing $50 billion from the Fed as well.
4. Chris Carr | February 20th, 2008 at 11:45 pm
Yes, good, creative post.
The only bright spot for me on a topic like this is that people under 30 (i.e., most of you) will have to deal with this and pay these bills, which my generation and older have rung up, for most of your lives, as folks like me will either be in the retirement home or long gone to the next life. Just please pay it all off before my daughters graduates from college. Thank you. Thank you. Thank you!
5. Gary Chou | February 21st, 2008 at 7:58 am
One way to fix this problem as young entrepreneur is to vote for Ron Paul!
Just kidding, Jesse.
You were right in pointing out the dependency on Chinese economy. I too find the fiscal irresponsibility of the current administration far deviated from GOP doctrine of fiscal conservatism.
However global economy depends on America just as banks depends on borrowers. Our deficit is less of an advantage for other countries than a liability shared by all. As America goes, so goes the globe.
This morning for the first time since 1981 inflation and recession appear at the same time on the horizon, making any interest rate adjustment difficult, thus rendering Fed powerless to an extend.
Perhaps we just have to bite our teeth, hit the trough in one grand stroke so to allow the market to correct itself. Unlike Austrian School economics, I believe no stable growth could occur without cyclic adjustment.
6. Gary Chou | February 21st, 2008 at 8:11 am
Someone above (Simeon) proposed stop spending. With ambitious defense projects (moon base, F-22) and collapse of social security ahead, I for one propose:
1. Higher Interest Rate *Dramatically* and Allow the Temporary (Albeit Speedy) Contraction of Economy.
a. This should curb the greatest sin of economics-inflation.
b. This would also encourage consumer saving.
2. Higher Tax Temporarily
a. You can’t spend what you don’t have!
3. Charge High Gasoline Tax
a. Well this is just my personal agenda but I think no other method would lower emission and save environment than charge $6 a gallon. Talk about putting money where mouth is, stop giving tax incentive to Hybrid, stop encouraging alternative fuel by the government… simply charge $6 a gallon and I bet ya the market itself will demand alternative!
By the way, Hybrid doesn’t save emission because people would buy a Hybrid would have bought a Honda for example. Honda has 40mpg while Hybrid has what? 50, 60? But how about people who drive a Hummer that has a mpg of 20?
When you move from 20mpg to 40mpg and from 40mpg to 60mpg, the savings are drastically different.
If you drive 12,000 miles a year. With 20mpg, it costs you 600 gallons.
For 40mpg, it costs you 300 gallons while a 60mpg car costs you 200 gallons.
Do you see how moving from 20mpg to 40mpg, you save a whopping 300 gallons a year!! While moving from 40mpg to 60mpg, you only save 100 gallons? ONE THIRD of moving from a Hummer to an Accord!
So what we really should do is punishing gas guzzler than to encourage buying hybrids.
7. Jesse Bilsten | February 21st, 2008 at 8:48 am
The Ron Paul shots are easy and I’ll always concede his downfalls but with respect to fiscal policy there isn’t anyone else out there with the courage to tell it like it is. Personal politics are always fuzzy lines but I do think we need to cut our federal government in half at the very least. Drop all our organizations and not just curb spending but eliminate it all together. Return the money to the people through elimination of the IRS and the income tax and let them try and save the economy. It’s already been proven that it’s possible and the income tax really only pays for our national debt nothing else.
In regards to the higher mpg cars and expensive gas I think that’s a viable suggestion however I think what really needs to be looked at is our middle class (or lack there of). Not necessarily the little things. Although if you take John Cleese’s letter to our president seriously, we should increase gas to $8.
America’s middle class has always carried the vast majority of our taxes and made up most of our working class. However with the recent tax breaks for the rich and Warren Buffet’s 3% tax against his secretaries 30% we’re destroying (if not already wiped out) our middle class. That leaves the poor and the extremely wealthy to pay our way out. I’m pretty sure the wealthy will find loop holes and that leaves the debt with the poor.
There were a few articles mentioning factories being built back in America. Does that mean we’ll be the next China due to our growing poor? Cheap labor due to lack of education (see no child left behind) seem to be one of our futures. Does that mean we as entrepreneur’s should utilize the working class of the US (poor) just like we’re supposed to utilize the working class of China?
8. Eric Kvilhaug | February 22nd, 2008 at 10:03 pm
This problem is a two way street, way number one is the Chinese government investing billions of dollars into the American economy, the other direction is the American public spending billions of dollars on Chinese made goods. Anyway you slice it, the American dollar is funneling back to China.
Finally something I can really get into……. Hey Gary, my truck gets awesome mileage btw, if I’m nice to it I get 18mpg, when I tow my race trailer I get about 12mph, through the mountains I get 8mpg, and I wouldn’t have it any other way. It’s easy to say tax the gas, tax this tax that, but when it happens you will complain with the rest of us. The deficit will not be gone for a long time, just like middle class Americans, the more we take in, the more we will spend. And you can spend what you don’t have, the wonders of credit cards and loans.
When you find that Accord that gets 40mpg you let me know. Might also want to do some more research on alternative fuel before you praise them, we are a long way from being even slightly independent of oil, from a technological standpoint.
PS – The mileage tax is gaining ground, once this passes the hybrid people sure will be complaining then.
Leave a Comment
Some HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
Subscribe to the comments via RSS Feed