Lots of talk that rebates from Congress will be spent on imports and therefore not help US economy.

Wrong!

Yes, most spending will be on imports.

But non residents are now spending their ‘hoard’ of $US financial assets on our goods and services (aka, US exports).

If anything, the rebates will further reduce the desire of non residents to accumulate $US financial assets.

This means exports will probably increase even faster than we can buy foreign products with the rebates.

The media continues to get it wrong and be part of the problem rather than part of the answer.


♥

Leave a Reply