How foreigners will buy the U.S.

That's the message behind a World Bank report this week that imagines what the global economy will look like in a decade and a half. It is, to be blunt, a world in which Americans have sold everything that isn't nailed down to finance our fabulous lifestyles.

The World Bank projects that while the U.S. economy will expand by perhaps 40% in constant dollar terms, net foreign ownership of U.S. assets – stocks, bonds and property in the hands mostly of China and other emerging Asian countries -- will expand fivefold. This is the ownership society, though with others doing the owning.

The U.S. net international investment position – which compares the value of foreign-owned U.S. assets with the value of U.S.-owned foreign assets -- will hit a staggering minus-69% of annual gross domestic product by 2025, in the World Bank scenario. That compares with minus-18% now.

If you accept the World Bank's view, by 2025 the rest of the world will own something on the order of $13 trillion more of U.S. assets than we own of theirs. China alone will hold an $8 trillion investment surplus against the rest of the world, mostly the United States.

Those sums dwarf the deficits the United States has run up even in its past two decades of profligacy. It had a $2.7 trillion (see chart, right) negative international investment position as of 2009, the last date for which figures are available. If anything that understates the degree to which America has been living on borrowed money: U.S. current account deficits over the past two decades add up to almost $7 trillion, but we made much of that back on valuation changes (thanks to factors such as an ever-weakening dollar).

Aren't you glad we bought into the Reagan Revolution and "starved the beast?"

Aren't you glad we bought into the Reagan Revolution and "starved the beast?"

We may owe them a lot of money but we've got the biggest bad-ass military in the world, so just let them try to collect.....

We will just have to hope what happened to Japan happens to China when they were going to own the U.S. back in the late 80's/early 90's.



Sorry but much of China's success is that their workers work on pennies on the dollars as their American counterpart, have no OSHA regulations security their well-being, and they can produce goods at a fraction of what we pay. Sorry but if the U.S. quit buying Chinese goods, their economy would crash. They are successful because they their workers are treated slightly above that of American slaves 150 years ago. So would you prefer the U.S. system modelled theirs? Also, their economy isn't weighted down with entitlement spending like ours.

"Sorry," but it is our government free trade and union busting policies beginning with the Reagan Revolution which unleashed the out-sourcing and forced the US worker to compete with Chinese "slaves."

Sorry the only union Reagan busted up were the air traffic controllers and they haven't been outsourced, so once again, another wrong statement by you! Secondly, in right to work states which have low corporate taxes and/or no state income tax (Texas and Florida), companies are moving to those left and right. It is the union dominated areas like Detroit, Chicago, and Milwauki were unemployment dwarfs the national average. If saving money for a company is so wrong...why the hell did you ever come to slickdeals? Seriously, I can't imagine a single person who isn't a farking hypocrit criticizing a company for doing what it can to save money and maximize its profits while being a member of slickdeals.