Consider that foreigners bought $153 billion worth of American real estate in the FY 2016-2017—everything from New York penthouses to Nebraskan ranches. This has the negative downstream effect of increasing housing prices and rents.
Housing is 73 percent more expensive today in real terms than it was in 1973, and many young people can no longer afford homes in their own homeland. Likewise, even highly educated professionals are being priced-out of cities like San Francisco. By embracing free trade, Americans swapped “cheap goods” for high rents and big mortgages.
Is it worth it?
America also sells billions in equities , that is ownership of American corporations and the associated profits. As of 2017 foreigners owned roughly 38 percent of American equities, when including foreign direct investments foreign portfolio investments. This is up from just 12 percent in 2007, and the number is growing fast.
America pays for the rest of the deficit by selling debt. This is reflected in the endless growth of America’s public and private debt levels. Foreign investors own over 44 percent of America’s national public debt, valued at over $6.3 trillion. Foreign investors also own nearly 30 percent of all US corporate bonds, and a large percentage of America’s private debt.
As to the Chinese effect, corporate ownership provides a ready-made conduit for industrial espionage. Chinese have already leached trillions-worth of American technology and intellectual property via corporate takeovers and partnerships. That doesn’t;t take into account the technology transfer in manufacturing. China can now manufacture computers, printers, cell phones as we have transferred the technology. They no longer need Apple, HP or any American company.
Think about it, political independence cannot exist without economic independence. Too often economists forget that economics is not fundamentally about wealth. It’s about power. This is the real reason America needs tariffs.
It’s not just China, Canada, Mexico but a systemic problem. we are selling the core of this country for cheap imported Christmas junk. The question, do we wake up to the reality that our country is slipping away? When we reach the point of no return do we declare all foreign held assets null and void?
Just some things to ponder as some claim we need China, Canada, Mexico.