Are you arguing that the US standard of living is high because it is being subsidized by foreign investors?
If so, I think you're wrong. The US standard of living has been high since before there was a US, since the mid-18th century, maybe 250 years.
The most reasonable explanation, IMO, is that the US legal system protects ownership of private property, and enforces contracts, thus permits securitization of non-liquid assets. You can't wear land, or gold jewelry, or even labor, you can't eat it, you can't spend it - gold jewelry doesn't spend well. But if you own land, or machinery, or gold jewelry, or a factory, or a patent, you're not poor, either. You can pledge it in return for goods, service or money, and if you default, the creditor can take it from you. You can even get credit based on your job, but the interest rate won't be low.
Hernando de Soto, a Peruvian economist, has studied wealth all over the world, and says that people in places like Egypt and India possess great amounts of non-liquid wealth but can't securitize it so can't buy things.
I haven't really taken a close look at the debt-service ratio lately, will do so at some depth later this week, but can report that credit card companies are eager to extend credit to my bankruptcy clients as soon as they are discharged, if they have a reasonable employment history.
Reason being that prime is in the single digits but people who just went through bankruptcy are paying double digits for credit, and can't file again for six years.
I mostly do Chapter 7 bankruptcies, which are for people without assets to pay their creditors. I do have a couple of Chapter 13s, which means that the debtor will have to pay off the creditor over time. But people with assets and jobs are for the most part not filing bankruptcy, they're servicing their debt.
I've been reading forecasts of gloom and doom on this board and some others since June, 1998 - in the meantime, of course, neither gloom nor doom have transpired, although we did have a tech wreck, which is for the most part behind us.
Instead of dreaming of the day that Norteamericanos live Third World lives, why not dream of the day that Latinamericanos live Second World lives? |
