Originally Posted by
DYNASTY HVY
What are your thoughts in regards to the massive amounts of wealth redistribution from this country to Communist China ?
That is an interesting question. There are two issues here, if I take your meaning correctly.
The first issue is that of the Chinese buying our debt. If we are getting outside financing to invest in some component of the American economy, that is not necessarily a bad thing. Yes, we would owe the Chinese the original investment and the interest they made over the course of the loan; however, if it was a productive investment something would emerge that would pay back the Chinese in full and still produce value for us. The problem is that much of the capital we are receiving from the Chinese is not being invested, it is being consumed. That is certainly a redistribution of wealth as capital that is eaten will never repay the loan.
The second issue is that of products being sold by the Chinese to the Americans. If the products are economically valuable and we are able to purchase them cheaply, that is good for the US consumer. US producers are typically not as happy. I think the problem is that the our economy is circumscribed by regulations. Moving on to a new enterprise in the US is fraught with legal snares, liscensure issues, regulatory approval, environmental impact, and the like. When innovators are copied, as they will inevitably be copied, the innovator should be able to move up to the next thing. In an economy domesticated by regulation that does not happen.
WW