Originally Posted by SteveZ

However, the high-end manufacturing doesn't promulgate the economic cycle as low-end does. Low-end tends to keep the money in local circulation, unless the low-end comes from offshore. Very few people buy aircraft or Cray supercomputers, whereas the number of coffee cups, TVs and radios, under-$500 electronics, appliances of all sizes are in constant sales.

Every consumer purchase of $100 for Chinese goods results in approximately $30 sent to the manufacturer, $10 in international shipping, and the rest to middle-men and domestic transport. The percentages may be off somewhat, but not by a lot. So, that's approximately 40% of the consumer cost for Chinese (and other foreign) goods forever taken out of our economic cycle for each purchase made. Now, if the Chinese imported the same value from the US, then the economic effect would be Zero. However, with our balance of payments way to the negative, their economy is a boomtown, and ours is heading for the dustbin.

You cannot keep having a negative balance of payments and be in a positive economic position.