China Overtaking American Economy in Size; What Does it Mean?

USA SOJOURNER TRUTH

On the red carpet on the White House Correspondent’s dinner pre-party, House Minority Leader Nancy Pelosi was asked if Americans should be worried about a report from the International Comparison Program concluding that China would overtake the U.S. as the world’s largest economy this year. Her response was interesting. As PJ Media reports:

House Minority Leader Nancy Pelosi (D-Calif.) dismissed a recent report that said China would overtake the U.S. as the world’s leading economy sooner than anticipated.

“Americans can be very confident in the strength of our economy,” Pelosi told PJ Media on the red carpet of the Google/Netflix White House Correspondents Dinner pre-party. “The most productive workers in the world, the safest place to invest money, the freest people in the world so I feel pretty confident and the American people feel confident about our country. Enjoy the evening. Lighten up!”

This is one of those rare, fascinating occasions where I largely agree with Nancy Pelosi. It may be difficult to believe. But it’s true.

Begin by considering China, which could also be called “the world’s largest bubble”. China is in the middle of an absolutely insane real estate bubble. Chinese builders are constructing entire cities that sit empty, malls that never open for business, and ludicrous theme parks that barely see any visitors. This is wastefulness on a monumental scale. The “communist” government is implicit in enabling all of this madness to occur. The Chinese Central Bank actually encourages this sort of behavior. This has a lot to do with why their economy appears so large. The is a massive amount of spending and investment occurring within the Chinese economy, and it’s producing things like empty cities. How good of an investment is that? Not good at all. It’s silliness. When this collapses, it will produce a massive recession in China.

China is the world’s most populous nation. It’s not outrageous to think that they would eventually be the world’s largest economy. What does that really mean, anyway? Switzerland’s economy is not large in comparison to the US or China; but it is prosperous. So are the economies of Canada and Luxembourg. The people in these nations live pretty well. The “size” of an economy is not directly indicative of actual ground conditions and quality of life for the citizens. China might have the world’s largest economy. So what?

As for Pelosi’s statement, she’s mostly correct. The American economy is still one of, if not the, best economies on the globe. In general, American culture is one of the only world cultures that significantly values entrepreneurship, capitalism, and most importantly, liberty. Money is, in general, extremely safe when invested in American markets. This is why wealthy Chinese have been buying property in the U.S. in droves. They want to lay down roots in America, because they recognize it as a safe place to squirrel away capital. Finally, America certainly is one of the freest economies in the world. Don’t get me wrong, there are quite a few sinister undercurrents at work eroding economic and civil liberty in America; but there are few other nations which compare favorably to the U.S. in terms of economic freedom. Chile is one; Switzerland, Australia, and Singapore also. There are a handful of others, mostly Western nations. There are zero nations anywhere near as economically free as America on the African continent.

Like I said, there are indeed a number of monstrous trends at work in the American economy; but we ain’t no North Korea or Cuba. On-the-whole, we do have it pretty good. China’s economy may grow larger than that of the U.S., but nobody should be concerned that this somehow means China will dominate America and bring us under their heel. If you’re worrying about it, you’re wasting your time. Want something to be concerned about? Then worry about the unfunded liabilities of Social Security and Medicare.

Now excuse me while I go purge my mind of Pelosi-related thoughts.

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