Sustainably Hustling and Cheating to Become a Fully Developed Nation

China revised up its nominal 2018 gross domestic product (GDP) by 2.1% to 91.93 trillion yuan ($13.08 trillion) and this keeps them tracking to the promise doubling the size of its economy by 2020 from 2010. The current round of revisions is the result of the census uncovering previously unrecorded activity. China is tracking to 100 trillion yuan in GDP in 2019 and should have 108-110 trillion yuan in GDP in 2020.

There is real economic growth and activity but it can overstated and even understated at times. The past few years are probably seeing overstated economic figures. However, there is growth in power generation, cities, industry, technological research and more.

China only has about $1.6 trillion in foreign debt. Total China debt is about $40 trillion. China’s GDP will be around $15.3 trillion in 2020.

China’s economic miracle has had a lot of real productivity growth over the last 50 years.

Some China bears have said for decades that China will have some form of debt or economic crisis or economic depression. China’s corporate and government debt is about 305% of GDP. The central government portion is about 60% of GDP. Japan has a government debt that is over 220% of GDP. Japan’s government debit is about $12 trillion.

Unreported Chinese local government debt could be 30 trillion yuan to 40 trillion yuan (about $4.34 trillion to $5.78 trillion), credit analysts Gloria Lu, Laura Li (S&P Global Ratings).

To encourage economic growth in the region, local governments in China have invested heavily in infrastructure, often using financing structures known as “local government financing vehicles,” or LGFVs.

China is making more and more of the world’s products. If the US Banks were too big to fail in 2007 and 2008 then how can China’s banks and economies not be too big to fail at 15% of the world economy? How about when China’s economy is 20% of the world economy in 2030 or 25% in 2040?

The US economy also has huge flaws and inefficiencies. The US is spending $500-700 billion per year more than China on the military, spy agencies and Veterans administration. The US does get to throw its weight around the world in the middle east and other places. The US wasted most of the $6+ trillion in the middle east wars.

The US overpays for healthcare. The US spends about $10,700 per person on healthcare. This is two to three times more than other developed countries (Canada, Japan, European countries). The average for OECD countries is a little less than $4000 per person. The US is spending about $3.5 trillion per year on healthcare. The US does not have longer life expectancy than the other developed countries. The US does contribute more new drugs and develops more new medical devices and treatments. I think the US could adjust down to $4000-6000 per person with medical system reform without harming medical results. Two-thirds of the medical costs are staffing costs (Doctors, nurses and staff). Canada and other countries have tighter controls on what hospitals and clinics can charge which basically lowers the salaries for doctors, nurses and staff.

The US and China combined economies are about 40% of the world economy. Neither economy could “collapse” without chaos for the whole world. Europe and Japan have virtually zero economic growth and zero to negative interest rates. The US and China are the tallest midgets in the world.

I do not see any day of reckoning for either nation. There can and will be large bankruptcies. China could restructure industries and companies and may have a currency crisis at some point. Ford and GM could go bankrupt in the future.

If this happens ten years or twenty years from now then China will be 70-80% urbanized and most of the workforce will be highly educated. China will still have modern cities and modern infrastructure.

China may be faking some numbers and cheating on various aspects of their economy and with the world system. There are also fragilities and issues with the US economy.

India is faking some economic numbers as well.

We are all just going to keep pretending that all of the emperors have clothes.

What is the difference between this and Greece? Greece had messed up spending and economics but the people were not using it hustle and build anything of value. China could be overvaluing what they are building but they are building like crazy. Greece was also not too big to fail. China has been hustling (aka working hard).

The other aspect is that sometimes markets collapse because of over-supply. The good thing about China’s ability to build rapidly, is that China could unbuild ghost cities or malls. They can replace massive swaths of construction for anything that is unuseful or oversupply. China can unbuild its way out of oversupply. They do not have to wait for market demand to grow to absorb it. China replaced many of the buildings used in the 2008 Olympics months after the games.

If the buildings are only kind of permanent or can replaced in less than a year then they become short term assets or become quick write-offs. Dynamic and fast construction and de-construction can cover or recover any sins of over-supply.

We will continue to build houses, cities and industries and research new technologies. Hopefully, we reach real big innovations (like true Artificial general intelligence, molecular nanotechnology, mass-produced nuclear fission or nuclear fusion, a true space age). The world can then grow its way out.

66 thoughts on “Sustainably Hustling and Cheating to Become a Fully Developed Nation”

  1. The thing is, if insurance companies sucked out all the money, they should be highly profitable. This does not match with reality. The reality is, Apple is way more profitable than insurance companies.

    I think that at the end of the day, there is a diminishing return on health care spending. Say, someone with end stage cancer at the age of 65 will cost half a mil for treatment and it may not even buy a month of extra life.

    I think that there is a natural limit to how long we will live, based mostly on our life style, genes and outlook. The marginal return between 5K per head and 15K per head maybe very load indeed.

  2. Yes. There is definitely a point where trying to save money means you waste the (little) you spend and have to spend again.

    I’ve heard it stated as “poor people have to buy twice”.

    Fortunately this is usually obvious if you have any experience in that product or service. Where people get caught is if they are trying something completely new to them where they can’t tell the difference between “a fair deal” , “a good deal”, and “useless garbage”.

  3. yes and no. If you are a visitor and are part of the insurance scheme you pay like anyone else. Otherwise they will treat anyone (just like the US if it’s under EMTALA) and you will be invoiced the private rate. For a brain MRI it is about $250 (at cost) and then depending on hospital about $50-150 on top of this. Then if you can pay this (obviously the MRI is just one part of the /diagnosis treatment) or not is the question.

    There is a “big” problem with foreign skiers who go to Japan, break a leg and then skip the bill. Though hospitals are now waking up and first ask you for your credit card. JPY500k is the norm downpayment.

    You can fly to Japan, but a MRI, like any procedure, will require a local doctor’s prescription and they will unlikely give you one unless you pay the full rate first. Besides, it is so much easier and cheaper to get a full medical diagnosis and treatment in Thailand or Singapore. Say you need a new knee. It is insane to get one in the states. Much cheaper to fly to Bangkok and get one, including airfare etc.

  4. So it is important to find the value of the 1, in order to not
    get negative returns. The dollar is a good 1 for giving alms,
    I give ten cents to a beggar, he punches me in the nose.

  5. I think it’s close to true for most things.

    But most people, most of the time, are operating down in the base value region of log 1 to log 3 where the ridiculous log scaling doesn’t have that much effect.

    You pay $10 for a meal, you get something nearly twice as good as a $5. Even a $50 meal is twice as good as a $10 meal. But pay $500 for a meal and you’ll be lucky to be twice as good as the $50 meal. A $10 000 dinner is probably a bit better than the $500 meal. And so forth.

    And there are usually thresholds. At some point the value just drops to zero. An $800 bicycle is about twice as good as a $400 bike, and maybe 75% as good as a $1600 bike. But a $200 bike, maybe a $150 bike, is functionally useless, with the owner needing to do mechanical work on it to give it functioning brakes, gears that don’t drop the chain, fixing misaligned seat etc before it is safe to ride more than around a playground.

  6. One thing is it is open to everyone not just the people of Japan. You can fly to Japan for an MRI vacation and spend less than here. If the government was losing money on the deal it seems like it would have been restricted to just the citizens.

  7. Yep, my wife and I own our houses outright. We drive older cars that are paid off. We pay off all the credit cards in the grace period each month (which leads credit card companies — no lie — to call us “deadbeats”). In short, we carry zero debt.

    Then we expect a good return on our investments . . . which would be virtually impossible if everyone was like us.

    Don’t get me wrong, we do spend. We travel and take nice vacations. We help our grown kids and aged parents with generous gifts and occasional financial support. We pay extortionate property taxes, state income taxes, and even city income taxes. And we even give some to charity (and do volunteer work in the community). But never as much as we take in, even before investment income.

    The economy would be a wreck if everyone was like us.

  8. This is what Argentina has done more than once. Essentially, it wipes out life savings or, more accurately, steals them to pay the piper.

    It costs their economy more than just the lost savings, though. If people can’t keep some of what they save, or some of what they invest, they stop doing those things.

    We know that debt in our personal lives is something we would rather not have, and we tend to like it if we are in a position where we have paid it all off (own our homes rather than pay mortgages, and so on). But debt is an entirely different animal when we look at it outside of our personal finances.

    Something like 95 to 97% of all money in the US is created, not by the treasury, but by banks. This is somewhat controlled by bank regulations, but the point being, without the money the banks create through debt, there is no money, and then the REAL crisis ensues (think Great Depression, which began when the banks had to write off too many bad loans, destroying debt, and eliminating money from the supply available). This is why “bubbles” are a problem. Something, anything (say mortgages for example), being grossly overvalued is all it takes to get started . . . but I digress.

    As a relatively healthy economy and population grows, the money supply has to grow or, again, crisis.

    A problem arises when too much debt is allowed to be created, outpacing the need and growth. How much is too much? Good question, but there are lots of answers, and none are guaranteed to be right.

  9. It is true for some things (particularly wines), but I strive to avoid that.
    And if everybody would behave like me, we would see some results.

  10. I think I can actually understand saying, “If you don’t like being treated by a black doctor, we’re fine with you not being treated.” Though in a free market that wouldn’t be a problem because you’d be choosing your own doctor anyway.

    I’m more concerned with something like the IRS targeting scandal, only generalized to health care. Too many health care decisions are opaque, it would be relatively easy to systematically deliver worse care to people of the “wrong” party.

  11. It is easy to compromise the system with money. Many a CEO paid gazillions for the pleasure of offshoring operations and opening up their patents to be stolen. Universities paid gazillions to educate them and have them sit in research parks vacumming info. We are just a bunch of greedy dumbasses.

    Kompromat? I dunno, I suppose there is some too. I think waving the dollar bill is so much easier.

  12. Don’t underestimate the extent to which pro-China policy was the result of penetration of our government, not genuine “mistakes”. They’re doing a much better job of compromising our political system than the USSR ever did.

  13. That’s mostly a matter of lifestyle, though, not medical treatment. There’s only so much that medical treatment can do to negate an unhealthy lifestyle.

  14. Sort of. The price to YOU is substantially higher in the U.S. compared to Japan, but the cost of producing said MRI is more or less the same. The machines cost almost the same, labor costs etc the same (assuming the same degree of usage – these are expensive pieces of kit).

    Japan heavily subsidizes MRIs while the variation in US pricing it huge and hinges on how much leverage the insurance company has.

  15. England and the USA are not the only possible health systems.

    (I don’t know where you live Jan, but the system you describe sounds like the English one, or a similar one.)

    There is a midway point of having a largely government run system for the average person with average health issues, but allowing the provision of private services for pay.

    Indeed if a system outright bans private providers, that probably indicates that said private system would be embarrassing to the public system. And when the expensive private system is obviously preferred to the “free” public system you can either improve the public system or come up with some ridiculous reason to outlaw the alternative.

  16. China administration is consistant. US democracy keeps the ruling party changed. We go straight road ahead. US go zigzag, if not return. Who will win in future?

  17. The American population is made up of large numbers of people from the third world. Compare like with like and the numbers are not so bad.

  18. Japan didn’t allow any major sharp readjustments or bank collapses. Did that go well for them?
    Per capita GDP in Japan today is the same as 1994.

  19. Political stability trumps economic. Always, when it comes to China. Push comes to shove they will throw HK under the bus and endure the wrath of the West. They will gladly trade zero/negative economic growth (and make up the difference with fake news) for stability. the Cultural Revolution killed millions and made the political system even stronger….

    This priority – stability first – is counter-intuitive to the West who are programmed to think that money and economic growth is the path to prosperity and stability. That mistaken attitude led to “allowing” China to join the WTO and essentially take over the West’s industrial base, and a hope that China will change it’s political system. Instead, the opposite happened.

    China’s leadership will choose mass suffering over wholesale changing the system. That could happen if there is a fuel embargo (e.g., in response to a HK military takeover).

  20. I’ll have to look for it, but there is an analysis written by Chinese engineers to the CPC that outlines the challenges in going full bore nuclear and how to reduce foreign reliance on oil and gas. At least for electricity. Boils down to people and expertise versus money, and to some extent securing “cheap” supplies of U. Also, no real effort to be “first” in MSR tech because China is generally risk-adverse when it comes to deploying leading edge tech.

    But bear in mind much of oil/gas is still needed for fuel and for petrochem. The latter is the feedstock for almost everything they export. You can’t build Iphones without polymers. Lastly, despite the “command and control” system and the potential to turn on a dime, there are lots of competing interests and people who have vested interests in status quo. Uncle Xi might be an emperor, but he is not an absolute ruler. Just yet.

  21. If I wanted to be really worried, I’d be concerned that they were going to get through this without revolution. Because that would mean that China has found a form of totalitarianism that works in a modern society, and that would be truly terrifying.

  22. OK Yes they may add something but minuscule in comparison to their costs. I have heard that for every doctor or nurse there are TWO people shuffling paper

  23. Still the average American lives less than the average Japanese, Swedish or Italian. Not such a great result IMHO . Just saying..

  24. The story about the Venezuelan cryptocurrency was just a marketing ploy. It never really existed, so I don’t understand how it proves that crypto isn’t viable.

    If you mentioned the amount of electricity that Bitcoin was projected to be using in 2025 being on the same ballpark as all of Denmark, then you’d have a better argument. But Venezuela? Not really.

  25. Thank God for the illusion. Just imagine what would happen if everyone listened to the doomsayers and stop spending. It would be “Stone Age’ here we come.

    A high productive economy does not exist without prolific spending. While a miserly behavior is OK for some. It would be death for all.

  26. As someone put it:
    Over the previous century, China had the Taiping rebellion(20-30 million dead), Great North China famine (9-13 M dead) the boxer rebellion, the collapse of their monarchy, great Qing famine (25M dead) mass civil wars (7M dead), a mass famine (10M dead), a communist rebellion, the great leap forward, more mass famine (up to 45M dead) and the cultural revolution. To expect to then spend the next century going through an entire industrial revolution all the way up to modern western wealth levels without even a single depression is ridiculous.

    And, unlike the USA, China has not shown any ability to get through any period of strife without it turning into yet another humanitarian disaster.

    If you want to be really worried, maybe the crackdown we are seeing right now in the Uighur region, Hong Kong, and the rest of the Xi reversion to hard line policies is actually the reaction to economic stresses. In which case the crackdown is only making the economy weaker, which means more crackdown, which mean less growth, which means more crackdown… repeat until something really bad happens.

  27. The dinosaurs tried and failed.

    Dinosaurs ruled the planet for hundreds of millions of years. Arguably they are still highly successful as the racket from my back yard indicates.

    You need a better metaphor.

  28. Just to rub salt on the “getting old” wound, Chinese culture appears to expect retirement to occur in the mid 50s, as opposed to mid 60s as the western nations currently do, or mid 70s as we should probably be moving towards.

    This may well be a hold over from the time (literally within their recent memory) when almost all jobs involved brutal hard physical labour, where you just couldn’t sustain it past 55, especially on a rice and occasional soy diet.

    So there is that cultural adjustment yet to come, but right now there are all the senior engineers and business leaders and at just the time that the gweilos are starting to make their big career moves etc. the Chinese are stopping the hustle and looking to go part time or something.

  29. its obvious if you convert one party communism into capitalism with out multiparty democracy to act as a counterbalance of opinion…then its really become the “chinese nazi party” instead…

  30. thats just the way the chinese-mind works… truth is what they want to believe, not what it actually is… if they dont want to believe it… then, its not true to them… its a form of ultra-national fascism…

    the difference between german in ww2 and china today is that china is already united as a han empire and has been for a very long time… germany under hitlter never succeeded to uniting the Germanic races of europe…they were always in war mode… on the other hand…china is a fascist empire that succeeded to united all the hun people… and they still acts like fascist in the way they think because they are ethically all chinese and nationalism is above all even truth…

  31. China already uses huge amounts of cement (concrete) and steel – if they plan to replace their buildings factories and roads we will all die from the CO2

  32. China grew fast because it was catching up. That is in not in contention. This is because they had access (one way or another) to the most modern tech and know-how that the First World created.
    But drive twenty minutes from anything foreign travelers see, even Shanghai, and what you find are still third world conditions, even in semi-rural and rural areas. Worse, cross the border from Russia into China (I’ve been there) and it goes from endless forest to endless rice paddies with little islands of shacks at various points. Necessary as most of China’s land is not arable, despite it being almost identical in size to the U.S. 
    They’ve already started heavy duty automation. They have to. But while it will help out the coastal cities, the rest of China will find itself increasingly left behind.
    Then there is the big one, demographics. There is an expression for developing countries called: ‘Getting rich before you get too old.’ China already missed it, even though all the birds have not yet come home to roost. The average Chinese adult is now older than the average American adult and that gap is going to grow. 
    China is about to experience the most rapid aging crisis in human history, with the ratio of workers-to-retirees shrinking from 8-to-1 today to 2-to-1 by 2040, with about $10 to 100 trillion in unfunded pension costs.

  33. Concur, and I’ll raise that.

    The United States has three times as many lawyers per capita than England (a nation swarming with lawyers) and over eighty(!) times as many as Japan.
    Because the U.S. harbored 1.22 million of them as of 2011, and so much of their cumulative effort is directed towards rent-seeking, as contrasted with essential maintenance of the social contract, they cost the US economy an average of over one million dollars each per year (somewhere in the vicinity of 1.5 trillion dollars annually).
    How much does malpractice insurance add to the cost of medical care? It’s estimated that tort reform could eliminate up 27 percent of medical costs. In other words, 27 cents of every healthcare dollar goes toward litigation BEYOND what should be necessary. How does that help lower- and middle-class families struggling to make ends meet?

  34. And what about the fact the the US always gets a new treatment first? Forget about the quantity MRI’s for a second.

    Who do you think will get longevity drugs first, Europeans or americans? And don’t you think that has *something* to do with you capitalistic healthcare system?

  35. But it’s not only older people that gets a rough deal. Immunity treatments are really a no brainer. You reduce the need for medicines by a large factor and improve the quality of life for the patient. Yet, it is only given to a minute fraction of the young allergic (not to mention older) patients.

    Why? Well, it’s a way to save money. The patients have to shell you the money for medicines every spring and summer, and the money is not drawn from the municipal hospital….

  36. Speaking as a person living in a country with socialized medicine, it’s not all what it is made out to be. First off, you don’t get the medical aid needed once you are past a certain age. A doctor will usually not give you anything to help you maintain a good sport performance if you are 40 years or older. If you can walk and are not in pain, that’s good enough.

    In the US, you can say F-U and take your dollar to someone that will give you what you need. In Europe, the doctor will decide if the healthcare will go to you or someone else. Do you really want to trade your freedom for slavery under government bureaucrats?

  37. When you account for homicides and traffic accidents, the US longevity looks pretty good. So I would say that you have a darned fine healthcare. If you also avoid eating fast food etc.. I would guess – but I am willing to be proven wrong – that you have the best healthcare in the world.

    Second, your capitalistic system finances all the development of new medicines in the world. So without it, no new medicines.

    Given all that, are you sure that the beancounters ads *nothing* to you healthcare system?

  38. The problem with thinking that nationalization makes economic sense, is that you’re replacing a cartel you can (inconveniently) opt out of, with a monopoly that has an army.

    If the government had the comprehension, the will, even the inclination, to run a nationalized system that was better than our current insurance based system, they’d easily be able to reform the current system without nationalizing. The one implies the other, many of the reforms needed are pathetically obvious: Cutting insurance loose from employment, getting rid of certificates of need, expanding availability of HSAs and medishare programs, price transparency. (Thankfully there’s starting to be some movement on that last.)

    Government doesn’t nationalize industries to reform them. It nationalizes industries to centralize power. And then they operate the nationalized industry with that aim in mind.

    If you don’t like your insurance company trying to figure out whether it’s cheaper to pay for your transplant, or string you along on cheaper treatments until you die without it, you’re going to love the new system trying to figure out your politics before letting you have the transplant.

  39. “I do not see any day of reckoning for either nation. ”

    That’s exactly WHY there will, eventually, be a day of reckoning.

    If the edge of the cliff was clearly marked and visible to all, who would ever go over it? But as it’s hard to pin down just how far you can go in that direction, nations keep creeping into ever higher debt ratios, and then one day find they’ve gone too far.

  40. China may be faking some numbers and cheating on various aspects of their economy and with the world system. There are also fragilities and issues with the US economy.

    Beware the fake figures:

    How badly is China’s economy doing? Look behind the official GDP figures

    “There is an immutable rule in nature and economics. The bigger you are, the harder it is to grow. The dinosaurs tried and failed. There are verbal reports of Chinese academics calculating China’s 2018 economic growth at as low as 1.5 per cent, rather than the
    official 6.5 per cent. That seems too low to me but when I tested it among my China-based investment management buddies, it caused little surprise. After all, we have seen substantial declines in many of China’s economic indicators in the past year. That slow pace would put China behind the US, which overstimulated its own economy through big tax breaks.”


  41. Greece and China are not comparable, and not because of their relative debts. The critical difference is that China’s debt is mostly money it owes itself and Greece’s debt is money it owes outsiders, and can never repay (see Yanis Varoufakis’ many articles and speeches about this). China is monetarily sovereign, while Greece is part of the bank-corrupted EU and it not sovereign. It’s like comparing the state of New York (or any state) to America. If China had to it could create money to pay off any internal debt, including that of its own companies, while Greece cannot…unless they bail out of the EU, as they should, and re-institute the Drachma, and let it float and devalue against other currencies. That’s what countries used to be able to threaten to do, until the EU came along, and that kept things relatively stable for decades. Now, the banks impose austerity in the EU and will gradually strangle all its economies, even Germany’s, until the whole system collapses.

  42. Plus China would burn more coal for electricity until the nukes are built and try to displace oil usage with coal.

  43. There are bubbles and they will burst but the lesson from 2008 is that the countries will print trillions (or use financial tricks) to re-inflate and prevent the biggest overall damage to the economy. The financial bomb goes off but huge spending occurs to stop dominos from falling and the illusions are restored.

  44. China imports about 10 million barrels per day. This is $219 billion per year at $60 per barrel. They do also import natural gas. Plus they import about $300 billion in silicon chips. In a semi-crisis China would ration oil and enforce various aspects of car-pooling. Didi is China’s Uber. They could require far more X-pooling rides. China would then definitely accelerate the buildout of 500 GW of nuclear power and accelerate electrification of trucks and electric taxis and buses.

    I have actually been somewhat surprised that China has been not aggressively moving faster on buildout that would reduce oil imports and silicon chip imports. It was pretty obvious to me and have written prior articles about it.

    I do think those are the obvious moves. Thus China will be helping Tesla make more factories and be an early adopter of a massive buildout of electric commercial trucks and buses. Just electrifying most commercial trucks and buses would take out about 3 million barrels per day of oil usage or about $70 billion per year of imports.

  45. See me discussion above about the unnecessarily limited supply of top university spots. Most students at the big schools are going to massive lecture halls with assistant professors or teaching assistants. There is no reason to have such limited admissions and such high prices. Admit ten times more and drop costs 5 times.

  46. The US also has the university education racket. Canada has various world class universities in global ranking but the cost is c$5000-12,000 per year in tuition. Canada universities like UBC and Toronto created many campuses and can admit 70,000-100,000 students per year vs Harvard admitting about 5000 and costing $40,000-60,000 per year. Asian countries like Taiwan and China used to have far more limited top quality universities and were vastly undersupplied. If undergrad or trade schools are part of an education to be productive for society then supply and costs need to be more like high school.

  47. Also insurance covering existing conditions is basically fraud. Insurance is basically defined as P(event) * cost of event + overhead & profit. If you already have the condition, going through insurance would be the more expensive route since you have 100% * the cost + insurance company overhead and profit. Forcing coverage of pre existing conditions is just pushing it out onto the rest of the insured.

  48. MRI in the US is easily 10x more expensive than japan for example. Part of the racket is most states require a ‘certificate of need’ to open any new medical facility, with the evaluators of such a need being the local medical facilities you would be competing against.

  49. Yep.

    Thing is there may really not be an alternative than nationalization of health care that makes economic sense. And we (in this discussion, and those who might be following along) need to REALLY be aware that there are millions (literally!) of insurance parasites tapping the money-hose between the insured and the medical provider networks.

    They have quite a bit of political clout.

    So much so, that they’ve utterly hoodwinked politicians and the public alike into believing that not-so-independent private health care is righteous and The Best, and ought to be a birthright.

    Or something equally absurd.

    Seems like we’re agreeing.
    Just Saying,

  50. Outrage at the insurance racket is totally justified. What to do? I have seen the NHS in England up close and it’s not bad. But there has to be a better solution than government control.

  51. China has the most transparent government on earth–if you can read Chinese.
    Even if you cannot, you can track every promise it has ever made by following its Five Year Plans. As it turns out, their government has kept every promise it has ever made–for 70 years.

  52. To verify a country’s claims about its economy, start by comparing its claims for GDP growth.

    Then check the bottom line: wages. If wages stay roughly in line with claimed GDP growth, then the GDP figure is probably ballpark accurate. If wages are lower, then GDP growth is probably lower, too.

    The US says its GDP has doubled since 1989. Did wages double too? If they didn’t, then the claim is probably bogus. Here’s what happened with US wages: they didn’t grow at all:

    When the PRC claims that its economy has increased twelvefold since 1989 then you should ask, Did Chinese wages rise twelvefold, too? If they didn’t, then China is lying about its economic growth.

    It seems that Chinese wages actually grew FASTER than GDP, so China’s GDP numbers are probably ballpark accurate.

  53. The United States spends 3× what any other country … per person … on the average shells out for health care for 2 main reasons. One of which is completely acceptable, and the other which is utterly detestable.  

    ACCEPTABLE: By almost any standard, American health care is pretty good. NMR and MRI and CAT scanning machines all oer the place. Full thru-artery non-invasive heart surgeries all over the place. Plenty of nuclear medicine labs, darn fast blood-and-bodily-fluids-to-lab results.  Good stuff. Even our “public medicine” is pretty admirable. And our medical establishment is actively researching most-every medical condition, pathogen and so on, trying to get-the-jump on both infectuous disease and chronic debilitating conditions.  

    DETESTABLE: Unfortunately, just about 3 out of every 5 dollars spent on US Health Care finds its way into Big Insurance coffers, not spent on actual health care.  The grand bureaucracy. Paper-and-records-and-claims-and-denials mills, endless red tape.  Some say its higher.  

    Between the two:

    (1 – ⅗) • (1 + 30% ‘premium’ care) = 52%.

    This means that we’re shelling out 2 bucks for every 1 buck of ‘real’ health care. To the insurance racket. How does that make you feel?  To me it is morally abysmal. NO ACTUAL BENEFIT is provided by the insurance mills exerting their oligopolistic hegemony over the public.

    Just one issue.
    Just Saying,
    GoatGuy ✓

  54. The problem with you approach is that China has very little transparency, we don’t know and they don’t know by how much they are missing up with adding value in their development frenzy. The US has indeed its inefficiencies, they are gigantic and waiting to be fixed, but still overall the economy is creating enough added value to make up for that. When you have a system that you are developing and you don’t know how much value you are adding, you are doomed for disaster.

  55. For one to state that actively “deconstructing” things that are in “oversupply” is an economic positive shows a deeply flawed understanding of economics. Also, all of those numbers on China’s internal debt are low by a factor of about 2x. Not that it matters much. If China is willing to keep its financial system sealed off from the rest of the world they can handle that debt load just fine (that’s not to say there won’t be consequences). “A rolling loan gathers no loss” as they say. The problem becomes what currency the Chinese will use to access the wider world. If their financial system is sealed off from the rest of the world the Renminbi isn’t viable. Other things that aren’t viable:

    -cryptocurrencies (how’s that working for Venezuela?),
    -“stable” coins (just an elaborate currency board with varying degrees of transparency),
    -the Euro (declining use in world trade since 2014)

    That basically just leaves the USD. If China’s current account with the U.S. flatlines that means that they’ll start bleeding their USD reserves as China will be a significant commodity importer for the foreseeable future. Their annual oil import bill alone is ~$1.2trillion so even *if* they have $3trillion in USD reserves that goes rather quickly.

  56. The economy runs in cycle. The downturn will eventually come. I remember right before the bubble burst in 2008 how people were pu-puing the people who warned that the bubble will soon burst.

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