Not long ago, back in the late 1990's, the American economy lead the world with growth, innovation, employment and low inflation. That was then.
Less than a dozen years later, the U.S. is clearly behind the curve with deflation and the highest unemployment since the Reagan administration despite record deficits that will continue for years to come.
Meanwhile, the Chinese Communists are schooling us and the rest of the world in Keynesian economic principles. Since political correctness in China is not anti-Keynesian as in the U.S., the Communists have been able to truly stimulate their economy.
Oct. 22 (Bloomberg) -- China’s economy expanded at the fastest pace in a year as stimulus spending and record lending growth helped the nation lead the world out of recession.
Gross domestic product rose 8.9 percent in the third quarter from a year earlier, the statistics bureau said in Beijing today. Separate reports showed industrial production and retail sales accelerated in September.
Surging auto sales helped industrial production to rise 13.9 percent in September from a year earlier, the fastest pace in more than a year, today’s data showed. Urban fixed-asset investment climbed 33.3 percent in the first nine months from a year earlier, the statistics bureau said, as the $586 billion stimulus plan spurred the construction of roads and power plants. Retail sales gained 15.5 percent in September.
Consumer prices fell 0.8 percent in September from a year earlier, the smallest drop since declines began in February. For the first nine months of 2009, the economy grew 7.7 percent, with domestic demand accounting for all of the advance.
Consumption, including household spending, contributed 4 percentage points of the total and investment added 7.3 percentage points. A decline in net exports of goods and services shaved off 3.6 percentage points.
The nation has countered an 11-month slide in exports with the stimulus package and a record $1.27 trillion in new loans this year. Policy makers also, from July last year, halted the yuan’s gains against the dollar, providing support to exporters battered by the contraction in overseas demand.
http://www.bloomberg.com/...
Is it only a matter of time before China surpasses the U.S. as the world's most powerful economy?