The Pennsylvania Plan (2): A Comparative Analysis of Debt-to-GDP Ratios and Economic Cycles in China and the United States
The Ideals and Reality of the Pennsylvania Plan The United States’ vision for the Pennsylvania Plan essentially centers on achieving economic revitalization through the reshoring of manufacturing, aiming to replicate China’s path of high growth, high inflation, and high income from the 1990s. The core logic behind this vision is that restoring manufacturing capacity will enable the replication of China’s economic miracle of that era. However, whether analyzed from the supply side or the demand side, this goal is simply impossible to achieve. The global economic landscape of the 1990s was entirely different from today’s: the world before 2008 was an era of extremely robust demand and severe supply shortages. In particular, after China’s reform and opening-up, the entry of one billion people into the global market generated an unprecedented surge in demand. At that time, a large portion of the population had not yet achieved a moderately prosperous life, and demand for industrial goods such as home appliances and automobiles was in an explosive growth phase. The scale of this growth is something the current world cannot replicate. ...