Exporting the Unemployed, Debt: Japan and USA, China Cancels US Credit Card

Japan's newest export is unemployed people.

Japan is paying its unemployed to leave the country and never return, offering Y300,000 per unemployed person and Y200,000 per dependent (roughly $3K and $2k). The government is targeting immigrants such as Latin Americans of ethnic Japanese descent, including over 300,000 Brazilians, who had migrated to Japan during a tighter labor market in Japan.

United States exports its unemployed.

Mexicans who entered the United States for work (housing bubble, construction boom) are returning to Mexico because of the U.S. recession, a reversal which reduces real unemployment in the USA but also further reduces demand for housing, house prices, and other consumer consumption (it also adds to the Mexican powder keg's list of woes: lower remittance income from abroad, lower demand for maquiladora output, higher unemployment, lower oil prices/revenue, depleted oil reserves, drug wars, H1N1 "swine flu," etc).

Notice in the illegal-immigrant case how the free market auto-regulates the supply of labor (self-regulating).

Obama plans to export (exile) civilian labor to Afghanistan (the LBJ Vietnam War solution to unemployment).

United States' greatest export is debt (and inflation).

The USA fueled its consumer binge by replacing export of industrial manufactured goods with export of its dollars and debt (causing inflation in other countries)--the export visible in the current accounts deficits of double the "sustainable" level (near 6% instead of the still dubious but popularly cited 3%).

"The U.S. Current Account Deficit and the Expected Share of World Output" (Charles Engel, University of Wisconsin, NBER, John H. Rogers, Board of Governors of the Federal Reserve System, Number 856, March 2006)


China "cancelled America's credit card." (Congressman Mark Kirk (R-IL), House Appropriations Committee)

Obama's record deficits plan to fund his spending binge with a greater export of debt but foreigners have started to balk, first by foreigners net-selling Mortgage-Backed Securities (MBS) as embodied in Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac, and now by foreigners net-selling Treasuries as Obama, Pelosi, Bernanke etc. try to guarantee everything under the Sun from toxic Mortgage-Backed Securities (MBS) to Chryler warranties to Joe Sixpack's delinquent credit-card balance under the fancy label of Asset-Backed Securities (ABS).

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Update: China is bypassing the dollar with countries such as Argentina and Brazil: "Brazil and China eye plan to axe dollar" (hat tip: RockyR).
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Foreigners are beginning to learn that the US government scammed foreign investors with toxic assets.

What happens when the debt conveyer belt stops and the USA loses its greatest export, unsustainable debt?