Friday, November 12, 2010

Obama Warns Asian Countries on Exports

map of Inter-American Development Bank members...Image via WikipediaIn a speech today, Obama urged the Asian countries to buy more US products. "One of the important lessons the economic crisis taught us is the limits of depending primarily on American consumers and Asian exports to drive economic growth."
As if its the selling of products to Americans that's the problem and not the massive borrowing the US has been doing.
All the speeches in the world will not resolve US trade imbalances. Imports will ALWAYS be greater than exports when a country consumes MORE than it produces. When you borrow trillions and subsidize consumer borrowing by keeping interest rates abnormally low, imports HAVE to go way up. You're borrowing the LABOR of others; it has to be delivered somehow. That means someone in some other country is working to produce something. Borrowing creates jobs alright. Just not for the borrower.
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