Since when is it a good thing that foreigners own our money supply or our debt? Foreigners holding our debt simply means that we are going to be paying taxes for years to come in order to pay the interest to foreigners.
Yet while these policies in restraint of trade can justifiably be opposed, economics shows that they do not hurt American consumers or manufacturers.
Before any American can be a "consumer," he or she must first have a job that provides enough income to buy or "consume" things. If the jobs that most Americans have go overseas and Americans find themselves working lesser jobs for lesser wages and lesser benefits, they will not have the money to "consume" anything. The prices of goods at the stores may be somewhat lower, but the prices of goods are only part of the story. Our income must pay for a place to live, and they can't make cheap real estate for us in some foreign country. Furthermore, if prices are cut in half but a worker's income is cut by 75%, the worker has lost ground.
Yet the only results such a policy will obtain are diminished prospects for American companies with overseas investments and massive unemployment in Third World countries, many of whose workers do not have the skills or training to earn an American minimum wage.
The issue isn't "prospects for American companies." The issue is jobs for American workers. The issue is whether we will be a country with a diversified economy or just a nation of paper pushers and paupers. Undoubtedly, those who are making a good living pushing paper will be happy to see prices drop. Furthermore, the loss of jobs for other people will bring some drop in real estate prices, so the paper pushers can buy more land. This situation will be great for the paper pushers until the Chinese invade and take their money, their stock investments, and their real estate at the point of a gun.
The winner of every major war for the past 150 to 160 years has been the side with the greater manufacturing strength. Admittedly, trade protections end up protecting many "dead wood" workers in American companies. The protection of these people is an unfortunate effect of any measures that we take to protect American manufacturing. Of course, we also have a great deal of "dead wood" at the managment level that is protected regardless of what policies the government enacts.
The economists are today's "chattering class." They produce nothing but words, and they have no concept for the value of real goods that others produce and how those real goods are tied to national security.
Bill
Yes, but at the same time, China wouldn't want to try anything stupid like nationalize the our factories because we can stop paying that interest.