why is US soo rich?

[kulki]

It seems to me that US is a net importer of goods. IF thats the case why is US so rich? Most asian countries grow by exporting their stuff to US and Europe. What does US do to be rich?

 

[Electric Amish]

Taxes??

Import Tariffs??

I don't know..

amish

 

[Vadatajs]

We're rich because we have several of the world's largest corportations. It's also cheaper to import goods from china and other countries than make them here, there are no import tariffs and the minimum wage is much lower overseas.

 

[Hammer]

Because we have the hottest chicks and they siphon money from the rest of the world.

 

[NikPreviousAcct]

A country doesn't become wealthy because they tax their people. A government becomes wealthy by letting it's people become wealthy.

nik

 

[Random Variable]

<< A country doesn't become wealthy because they tax their people. A government becomes wealthy by letting it's people become wealthy. >>


Exactly.

 

[dullard]

Think about the extremes:

Extreme #1) Your country exports nothing and imports as much as it possibly can. Over decades of time, your country builds up piles and piles of goods which all have value. Plus your country produces its own goods of value and keeps them all. This value makes your country quite wealthy. If this continued forever, your country would eventually have everything in the world, and the other countries would have nothing. Your country can just keep printing money and recieve all the goods you want.

Extreme #2) Your country imports nothing and exports as much as it possibly can. As your country produces its goods, it exports them all. Over time, your country would have nothing of value since it exported everything away. Your country would have no jewelry, no cars, no computers, no houses, no food, no clothes since they were all exported out. You have nothing at all except a pile of printed money that has no value since you won't purchase anything).

Ok which extreme sounds better? Having everything or having nothing?

Obviously neither extreme can happen in reality - but this really shows why America has more wealth, more goods, more of almost everything. Since it is a net importer. Countries that are net exporters have less of almost everything.

 

[b0mbrman]

<< It seems to me that US is a net importer of goods. IF thats the case why is US so rich? Most asian countries grow by exporting their stuff to US and Europe. What does US do to be rich? >>


Wrong...we're importing consumer goods but we're building up our investment goods. We're rich because adding to investment goods increases the capital/labor ratio which increases productivity

 

[BreakApart]

<< It seems to me that US is a net importer of goods. IF thats the case why is US so rich? Most asian countries grow by exporting their stuff to US and Europe. What does US do to be rich? >>




A good portion of it is from those same companies that import stuff to the U.S.
They always seem too turn around and bring their companies here and start investing in the U.S. markets directly.

 

[CaptainGoodnight]

I'll tell you why: There is no such thing as a Trade Deficit.

 

[b0mbrman]

<<

<< It seems to me that US is a net importer of goods. IF thats the case why is US so rich? Most asian countries grow by exporting their stuff to US and Europe. What does US do to be rich? >>


A good portion of it is from those same companies that import stuff to the U.S.
They always seem too turn around and bring their companies here and start investing in the U.S. markets directly. >>


w00t! Investing in our capital stock baby! 😉

That's why I think it's stupid when people say "Boohoo, the US is exploiting Iran and other ME countries for their oil. Wah, wah, wah (and other assorted crying noises)" when they see that US companies are investing in Iranian oil companies

Idiots, investing is *good* for their economy, not bad...

 

[Queasy]

The US is rich because it does not stifle innovation, it encourages competition, and it provides incentives to be successful. It also has an economy that thrives on entreprenuers and small businesses.

The US may import more goods but it provides many high quality services and "intellectual" goods that are not taken into account on the import/export reports.

 

[jjones]

<< Because we have the hottest chicks and they siphon money from the rest of the world. >>


lol, yeah, that's the reason. 🙂

 

[Cosmickarma]

main reason is...it is a country full of resources with a reasonable population....the us grows also in the most efficient way.however i really never understood the part :" although america imports most of its stuff, it is still so rich" . I think it is because no one abroad can afford the american goods because of the goods being expensive which is because of the high labour costs. i will have to say it is because of the natural resources that this country has that allows us to build a very strong infrastructure...most of the stuff we import are mainly consumer goods...none of it is really related to infrastructure.IMHO

 

[b0mbrman]

<< i will have to say it is because of the natural resources that this country has that allows us to build a very strong infrastructure >>


But most countries of the Americas has the same natural resources we do...

 

[Cosmickarma]

<But most clountries of the Americas has the same natural resources we do... >

i agree but it has to be only canada..the southern american countries have more people...but the us was a country built from scratch with the best people from around the world. the south american countries did have oppressive regimes..the spanish plundered and used the south americans...whereas the usa was built with a great constituon from the start that believed in freedom and fairness.....the status of the us did grow in post world war 2...i guess before that it was all great britain.

 

[kulki]

<< I'll tell you why: There is no such thing as a Trade Deficit. >>


what do u mean by that??

 

[b0mbrman]

<< i agree but it has to be only canada..the southern american countries have more people... >>


The US has almost 300 million people...



<< but the us was a country built from scratch with the best people from around the world. >>


Uh oh...what do you mean by that?



<< the south american countries did have oppressive regimes..the spanish plundered and used the south americans...whereas the usa was built with a great constituon from the start that believed in freedom and fairness.....the status of the us did grow in post world war 2...i guess before that it was all great britain. >>


Spain lost control of all of it's holdings in the Americas by 1826 (except for Cuba and Puerto Rico)

 

[Cosmickarma]

<< but the us was a country built from scratch with the best people from around the world. >>


Uh oh...what do you mean by that?



well i meant right from the start you had people coming in to the us with the sole intention of working hard and making it big...most of the people would built this nation were hard workers.....in the case of south america it is different

 

[Orsorum]

<< Think about the extremes:

Extreme #1) Your country exports nothing and imports as much as it possibly can. Over decades of time, your country builds up piles and piles of goods which all have value. Plus your country produces its own goods of value and keeps them all. This value makes your country quite wealthy. If this continued forever, your country would eventually have everything in the world, and the other countries would have nothing. Your country can just keep printing money and recieve all the goods you want. >>



Consumer-oriented economy... look at the Asian markets after the US tech bubble collapsed... Malaysia, Taiwan took a huge hit.. South Korea learned from it's own struggles in 98, is becoming more consumer-oriented itself.

 

[Rivergater]

talking about the trade deficit is pretty questionable.

lots of politicians think that its something that we need to address but at the same time, a lot of economists agree that in the long run, it really doesn't mean anything.

we buy foreign products with dollars. we sell american goods to foreigners for whatever there currency is. at the end of the year, it looks like we bought more foreign goods than we sold domestic goods to foreigners. that means we net an outflow of dollars out of america.

in the long run, that money we traded them for their products has to flow back into America.

 

[Rivergater]

GDP is a measure of our national output.
The United States rocks all other countries in GDP.

The economy keeps growing through innovation. The U.S. keeps getting more productive every year. Read about the Solow growth model.

Its true that part of the reason why our economy is so robust is because we rely on natural resources. Thats why a lot of countries criticize us for causing so much pollution. Countries like Canada suffer because all our smoke from our steel factories gets blown up there and it damages their forests and what not.

Our reliance on resources like oil, gas, and coal all contributes to our economy by making it cheaper to manufacture stuff. In other countries, they tax fossil fuels like gasoline at a high rate so people use it less. Thats why if you travel to Europe, gas prices are much higher vis-a-vis here in the states. Countries in Europe are also more used to using newer sources of energy than the US. They are better prepared than us when it comes time to make the transition away from fossil fuels.

But this is only a small part of economics...
There are many other reasons why the US is so wealthy.

 

[Bignate603]

Historically it's from lot's of resources, relatively high standard of education, and a very capitalistic system.

Right now it's because:
1. We own alot of business in other countries, we take profits from that and buy stuff, causing more imports. That wasn't produced in our country so it doesn't affect our GDP and when they calculate the trade deficit it's not factored in. That makes the trade deficit seem worse then it is.
2. Other countries are willing to hold onto the dollar. This makes it cheap to buy foriegn goods.

 

[SerraYX]

For import/export: We import more goods, causing a trade deficit and money goes to foreigners. They invest in us, bringing money back into the US and causing the demand and value of the dollar to increase. Japan has done this for many years, but the exact situation with them would take paragraphs that I don't feel like writing. In their case it works until your own country starts to have economic troubles. I highlighted goods because the US has a large trade surplus in the services that we offer to other countries, I believe computer software still falls under the service category.

You also can't exclude the fact that Americans are the most productive workers in the world according to international studies. Not that we work the most total hours, but the capital we are provided with through investments allow us to produce the most goods per unit of time and capital/money.

If you found a decent economic text or article about the gold standard, "dollar" standard, and today's "floating" values, it would help you out a lot. I'm enjoying my AP Economics course thoroughly because it explains all of these things to you.

 

[glen]

Rule of Law.
Low corruption.
Low taxes.