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The US has the benefit of being the financial center of the world that a majority of the world uses for trade of goods, debt, and currency. The US economy can "absorb" a lot more growth because much of that growth can be sort of sent overseas even when there is no more "room" in the US economy for it, and when things get unstable, there is a massively larger pool of capital to pull from for capital injections. China has no such deep integration into the global financial situation (yet), as much as they may want to be, and while the CCP has unilateral power to inject capital, they can do significantly less before the market panics.
It also bears mentioning that up until the end of the 1990's, the US economy was not quite so hell-bent on "all costs" growth. Under Clinton was the very last time the federal government had a balanced budget and GDP growth wasn't driven exclusively by deficit spending, and the US economy was effectively "free standing". But ever since Bush started his idiot wars we've been spending ourselves into the hole to maintain growth without doing anything to promote growth naturally.
Remember- government deficit spending is quite literally injecting "free money" into the country's GDP via issued debt to the rest of the world. If you look at the GDP for previous years and compare it to US government deficit spending per year, you'll notice that as time has gone on since 2001, more and more of the gdp "growth" we see has been comprised strictly of government deficit spending.
FY2015: deficit spending $0.44 -> gdp change $0.53T
FY2018: deficit spending $0.78T -> gdp change $0.89T
FY2023: deficit spending $1.7T -> gdp change $1.5T
(Ignoring 2020 as an odd year of course.)
The data above proves that deficit spending is having a diminishing impact on real economic terms in the US. Generally such debt injection has some knock-on effects that cause real gdp increase, but if you look at the FY2023 data the difference between deficit spending to real GDP change goes negative, which indicates the "real" US economy is actually shrinking when compared without the deficit spending creating imaginary demand.
The US has its own correction coming soon too. The federal debt bubble will pop sooner or later, as deficit spending can only last so long before the economy cannot willingly accept more debt. China was just the first to experience such a pop.
All of these economic effects are a natural consequence of a system built on infinite growth inside finite containers, you can't simply will the growth into existence when the supply of energy, materials, and labor demographics all are maturing and wanting to coast into a steady state before finding another avenue of nautral growth.
Thanks for all that information! The point about deficit spending in particular was something I had a vague idea about, but seeing the numbers on spending vs GDP change is very insightful. The US has a huge advantage with its top reserve currency status. I do wonder how isolated the US is from China's problems. It seems like so far it hasn't had much of an impact on the US, but it's hard to imagine failures in the second-largest economy of the world not having some sort of domino effect.
I'm not super well versed on the financial interactions between the US and Cjina, but I imagine the total US change will be a washout. The financial markets will dip for sure since many US based companies do massive amounts of business in China, but a Chinese stagnation will also drop the bottom out of the prices in all of the commodity markets that drive a lot of price inflation in the US. Cheaper US industrial/energy inputs means inflation drops and consumer spending/corporate capex can increase.
That's just a guess though, because China had also been rapidly developing ties to every other country outside of the West-centric financial bubble, and if those countries also see a contraction in Chinese investment, it could snowball a bit.
Will drops in commodity prices show up as deflation or will that just mean greater margins of profits?