“That’s Not True?!” – 3 Lies About the Economy We Repeat Every Day

Lies about the economy have been repeated so much they’ve begun to look true.

Textbooks will tell our great-grandkids that we lived in the “Information Age,” a time where the internet told us whatever we needed to know with the click of a button. But  in recent years it’s become clear that the term “Misinformation Age” might be more accurate. Mass media enables us to share knowledge at lightening speed, but it also lets lies spread from one corner of the globe to another in mere hours. With so much information floating around out there, it’s almost impossible to tell which factoids are true, and which ones are purely made up, especially when it comes to hot-button issues like the economy.

Don’t believe me? I’m going to tell you three statements, and I want you to think very carefully and decide in your head which one is a lie. Once you’ve got a good idea, scroll down a little and see if you’re right…

  • Most of what Americans spend their money on is made in China.
  • China owns most of the our debt.
  • Most of our oil is imported from the Middle East.

Got your mind made up? It’s a tough choice, isn’t it? For starters, all of those facts seem to be correct. We’ve seen them bumped around the news constantly, and in discussions around the water cooler and kitchen table they’re simply accepted axioms of argumentation. But do a little digging and you’ll find that, in fact, all three of the statements you just read were lies!

Surprised? Let me prove it to you.

Is most of what Americans spend their money on made in China?
Republicans and Democrats alike seem to agree that most of what we buy in the US comes from China. But, in reality, just 2.7% of personal expenditures in the US are made on Chinese-produced goods. “But wait, just about everything I see in Wal-Mart says ‘Made in China’ on the bottom!” you say? While that may be true, Wal-Mart is just a $260 billion fish in a $14.3 trillion economic ocean – a drop in the bucket relative to the economy as a whole.

(If you’re still not convinced, you can check out the BLS’s annual Consumer Expenditure Survey, which tracks this kind of stuff.)

Does China own most of our debt?
I’ve been talking to my friends about this little bit of misinformation for years. While politicians in Washington (including some Republicans) warn us that the Chinese could cash in their bonds at any time and bankrupt our nation, keep in mind that the Chinese government does not own most of our sovereign debt.

Who does? You do! That’s right, Americans, not the Chinese, own most of our debt. Government trust funds hold over $5 trillion, and states hold another $600 billion. The rest goes to foreign countries. According to the US Treasury, while China is the biggest foreign holder of US debt (with $1.14 trillion), it’s followed closely by Japan ($937 billion) and the UK ($397 billion).

Is most of our oil imported from the Middle East?
If the vicious fight over the Keystone XL pipeline told you anything, you’d know that we get a lot of oil from other regions besides the Middle East. But isn’t that where most of our oil comes from? Nope. Slightly less than half of all US oil is produced domestically (which is why slashing drilling regulations would help reduce the odds of $5-per-gallon gas this summer). Of the oil we import, only about 10% comes from the Middle East. Twice as much is imported from Mexico and Canada. So, actually, most of the oil we consume comes from friendly North America, which is a welcome relief.

Did you learn something from all this? I hope you did – specifically, don’t believe everything you hear, especially when it comes to the economy. Whether you see good or bad news coming out, ask yourself “Do the facts support what the media is telling me?” Failure to question makes us all vulnerable to manipulation and deception – and in an election with stakes as high as this one, deceived voters are the last things we need!

For those of you who are interested, I wanted to give a big hat-tip to this site called The Motley Fool for a lot of the information in this article. On my first visit to their blog I was immediately impressed by the content. If you’re interested in investing or the economy (or just proving people wrong all the time), you should definitely check it out!

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Posted in The Modern Conservative

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