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Monday, June 29, 2009

Another reason to worry about China 


Lest you think the Chinese will not sell our bonds and crush our currency when the spirit moves them, consider this troubling graph from The Economist:


China dependency bubble


It depicts China's looming "dependency bubble" (the huge ratio of old people and children to total population) which because of that country's strange demographics will make our various entitlement issues look trivial. The only way the Chinese will be able to finance care for so many people will be to liquidate their assets, including particularly our bonds. We need a plan for managing our own dependents that does not require the Chinese to do the saving on our behalf; they will need that money for themselves.

CWCID: Paul Kedrosky.


7 Comments:

By Blogger John, at Mon Jun 29, 02:26:00 PM:

Wait, this is China that we're talking about here. You're assuming that they will even care what happens to the elderly.

Sure, the Cultural Revolution is long over. But I find it unlikely that Chinese government leaders will be up at night worrying about poverty prevention and health care for the elderly.  

By Anonymous Anonymous, at Mon Jun 29, 05:18:00 PM:

This graph bears witness to the bitter fruit of Malthusian economic theory. China's one-child policy, originally intended to rescue China from poverty caused by overpopulation, has instead left China destined to suffer the poverty of demographic-driven economic decline. Interestingly, this demographic change begins to happen just as China should be taking her place as a dominant world power. Instead, she will sink into decline under the smothering effects of a welfare state coupled with an inverted population pyramid. China's only way out is to import between 100 and 300 million young workers from elsewhere in Asia to balance the population. Good luck with that.

Throughout history, leftist economics leads only to suffering and ruin. This is just another example.  

By Anonymous Anonymous, at Mon Jun 29, 09:18:00 PM:

The last comment was spot on. It may take 20 years, but China will fade because of this.  

By Blogger buck smith, at Tue Jun 30, 09:05:00 AM:

would be interesting to see the US trend for the same dependency function.  

By Anonymous Anonymous, at Wed Jul 01, 10:09:00 AM:

China is currently overextended on their loans. Their banks are in danger of failing in the not too distant future.

If this happens we are looking at staggering unemployment world wide. The US of Obama will probably have unemployment rates of 25% or more.

We don't have to worry about the graph in the article because the whole thing is probably going to colapse within the next month or so.  

By Anonymous Bird of Paradise, at Wed Jul 01, 12:11:00 PM:

And the communists treat their people worse then rubbish and the commies are what liberals are so admering  

By OpenID saneperson, at Thu Jul 02, 12:20:00 AM:

China is solving the problem of too many children with compulsory abortion. I'm sure they can just as easily solve the problem of too many elderly people with compulsory euthanasia. Every grandparent a wanted grandparent!  

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