Who worries about the US economy more?
- By Zhang Lijuan
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China.org.cn, August 1, 2011
If you ask Americans if they worry about the American economy, they will say, "Of course." If you further ask them if they are deeply concerned about the national debt, they might shake their head and say, "Not really." The reason is obvious: national debt does not go to American homes. Unlike the 1930s, the public has concerns about the recession and recovery but is without fears in general for the long run. They believe the U.S. will get through the current difficulties, one way or another.
Public confidence about an economic recovery also relies on tremendous government supports to the American people. As a kind of long-term policy in public finance, Americans continue to receive financial support from their federal government, which includes, but is not limited to, direct farm payments, food stamps, housing subsidies and health care. All of this is in addition to indirect subsidies from cheap imports, such as those from China.
Economists like to label the U.S. as a perfectly competitive market, thereby allowing American consumers to pay the lowest prices for the highest quality products. Today's emerging economies, such as China and India, try to sell their best products to the U.S., although they have to pay a high price for brand and reputation building. Trade dependence of the world leading economies on the U.S. has reached its highest level ever. It is no wonder the rest of the world worries more about the U.S. economy than Americans.
A group of college students from China are now taking part in a summer program in California. Before going to the U.S., they had heard so much bad news about the U.S. economic recession. But after a few days of being in California, they were all surprised by how inexpensive things were. Now shopping has become their priority. Some of them even have a fairly long shopping list from friends and family in China. To most Chinese visitors in the U.S., buying American brand but "Made in China" products is a rational choice. Not only are the prices cheaper, but the quality also is much better than the same products sold in China.
While the U.S. debt debate is now very fierce between the Obama administration and the opposition in Congress, both sides understand very well that the U.S. economy is solidly tied to the world market. As the largest consumer economy in the world, the U.S. is facing high unemployment. But low inflation helps all U.S. consumers. The consumer price index for all urban consumers decreased 0.2 percent in June. The food index increased, but it was a relatively modest increase. In general, the living standards in American homes have not been hurt by inflation. That is the foundation for a reviving economy. As long as CPI stays low, the general public will stay calm.
The author is a columnist with China.org.cn. For more information please visit: http://www.keyanhelp.cn/opinion/zhanglijuan.htm
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