For years, protectionists on both sides of the aisle have said that the United States trade deficit has impacted the net worth of Americans. President Donald Trump got into the White House by proclaiming that the Forgotten Man is getting poorer because the U.S. is buying more from China than China is buying from the U.S.
But is this true?
The American Enterprise Institute (AEI) published a new chart, using data from the Bureau of Economic Analysis (BEA) and the Federal Reserve, that compared the trade deficit and household net worth.
You may be surprised by the results.
Here is the chart:
Who cares about the trade deficit?
The U.S. dollar has lost 90 percent of its value since the inception of the Federal Reserve. China and other nations have given millions of Americans a form of economic relief with cheap goods. With $100, an American consumer can buy a t-shirt, a set of plates and cutlery, a toaster and a kettle. That’s fantastic.
The household net worth has been climbing only for the richest 10%. 90% of the U.S. population have only a 14.4% share. This slice of the pie is 50% smaller than it was back in 1989 and continues to slowly get smaller. The poorer half are so bad off that only 26% marry and most abort some of their children.