Joseph Farah was in a very pouty mood in his Dec. 4 WorldNetDaily column, lamenting that China's economy was on pace to surpass that of the United States:
At first glance, the news that China’s economy has surpassed that of the U.S. will probably result in yawns from the average guy on the street.
What difference does it make?
China’s population is a lot bigger than America’s. Big deal!
How does it affect my life?
But it is precisely at seminal moments like this, when another country’s economy is bigger than the economy of the United States of America for the first time since Ulysses S. Grant was president, that we should take a collective look at reality to figure out why.
Why is China producing $17.6 trillion in goods and services this year while the U.S. is producing $17.4 trillion?
Why does China now account for 16.5 percent of the global economy while the U.S. represents 16.3?
Only 14 years ago, the U.S. produced three times as much as China, so how did this change occur so rapidly?
Is it really important, significant, meaningful?
It is important, significant and meaningful.
Economic power translates directly to political and military power.
Needless to say, Farah was quick to lay blame for this. First up was abortion, because the children who were aborted in the early years after the Roe v. Wade decision would themselves be having children by now. Farah also blamed more usual suspects: the welfare state, big government, the alleged loss of the American work ethic.
But Farah's histrionics were overblown, as they usually are. And pointing that out is none other than his own employee, Jerome Corsi.
Corsi's Dec. 5 WND article doesn't explicitly state that he's correcting his boss, but he puts China's economy in perspective:
Has the Chinese economy really overtaken the U.S. economy as the world’s biggest?
Economists say it all depends on the metric used to measure the two economies.
The basic problem is that comparing the economies of China and the U.S. is truly like comparing apples and oranges.
China’s growth in recent years has been extraordinary, with the International Monetary Fund projecting a rate of 7.5 percent in 2014, nearly triple the 2.8 percent outlook for the United States.
But China, with a population of 1.3 billion people, more than four times the population of the United States, barely ranks in the top 100 nations for income per person. Chinese consumers are estimated to have only about one-tenth as much money to spend as Americans, on a par with the Philippines, Bolivia and Iraq, according to economist Brian Jackson of IHS Global Insight.
As of November, China, the leading foreign holder of U.S. debt, held an all-time record of $1.317 trillion of U.S. Treasuries, exceeding China’s previous high of $1.315 trillion in July 2011. Meanwhile, China’s holdings of foreign-exchange reserves surged to a record $3.82 trillion at the end of 2013, as noted by Fox Business.
The U.S. Treasury decision in November to issue more than $1 trillion in new debt to pay off old debt by retiring Treasury securities that were maturing and to fund new deficit spending by the Obama administration has been characterized as a “Ponzi scheme” by knowledgeable economic observers.
This debt analysis would indicate that the U.S. economy remains the largest in market value in part because of China’s willingness to subsidize U.S. growth by funding a large and increasing amount of debt.
Rarely does Farah get a public smackdown from one of his own employees, but that's exactly what's happening here.
Unfortunately, Corsi's bout of lucidity and common sense was brief; later in his article, he approvingly repeats CNSNews.com editor Terry Jeffrey's uninformed claim that refinancing federal debt is akin to a Ponzi scheme, asserting without proof that Jeffrey is a "knowledgeable economic observer."