Quote:
Originally Posted by BBQMan
Every bit of common sense would say that this is true. However, we have been doing this for decades. Money has been returning to the US in ways other than trade - services, immigration, education, technology user fees, land purchase, etc. All of us remember the 80's when the big concern was Japan, not China. That worked itself out in a series of ways and balance was restored and continues between our two countries.
My biggest concern, in regards to the balance of payments, is energy. This is the Achilles heel of our foreign policy, military capability and domestic economy.
BTW, it is not a question of how many people can afford a jet, but rather how many people make a living by creating the plane.
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I respectfully agree in part and disagree in part.
We've done this negative balance-of-payments for so long, we've become desensitized to the effect. The situation with Japan was "worked out" with a major devaluation of the dollar to the yen. In 1968 the exchange rate was Y360=$1, then in 1972 it was Y305=$1, by the early 1980's it was Y200>$1, to the mid 1990s of Y140>$1, to today of Y91=$1. We've already seen similar exhange rate dips against the Euro, the Swiss Franc, British Pound, Canadian Dollar and most Pacific Rim currencies. At this rate, the paper will definitely be worth more than the US currency rate printed on it.
I agree that people make a living making aircraft - at the system integrator and subcontractor level. I'm just not convinced that "aircraft" and other dazzler products are enough to support in any measurable level the national economy.