We are not alone. The US needs the world and vice versa

America first! That means different things to different people. To some it’s nationalism even isolationism. Such a position won’t end well in a global world.

The global economy is very important to the United States. The US is the world’s largest economy, and it is closely interconnected with the economies of other countries. This means that what happens in the global economy can have a significant impact on the US economy.

Here are some of the ways in which the global economy is important to the US:

• Trade: The US imports and exports a significant amount of goods and services. In 2021, the US exported $2.5 trillion worth of goods and services and imported $2.9 trillion worth. This trade helps to create jobs and boost economic growth.
• Investment: Foreign investors invest billions of dollars in the US economy each year. This investment helps to finance businesses and create jobs.
• Financial markets: The US financial markets are the largest and most liquid in the world. This makes it easier for businesses to raise capital and for investors to trade assets.
• Technology: The US is a major center for innovation and technology. This helps to drive economic growth and create jobs.
• Peace: The global economy is also important to the US because it helps to promote peace and stability. When countries are economically interconnected, they have a vested interest in working together to solve problems. This can help to prevent conflict and promote prosperity for all.

The global economy is essential to the US economy. It helps to create jobs, boost growth, and promote peace. The US has a significant stake in the global economy, and it is important for the country to continue to play a leading role in shaping it.

Here are some specific examples of how the global economy has affected the US economy in recent years:

• The 2008 financial crisis was triggered by a collapse in the housing market in the US. This crisis had a ripple effect around the world, and it led to a recession in the US.
• The COVID-19 pandemic has also had a significant impact on the global economy. The pandemic has led to a decline in trade and investment, and it has also caused a sharp increase in unemployment.
• The war in the Ukraine has affected oil and food prices. The conflict drove up global commodity prices, fueled inflation and damaged US economic growth. In this context, the U.S. economy faced significant headwinds from higher food, energy and raw material prices.

The global economy is a complex system, and it is impossible to predict with certainty how it will change in the future. However, it is clear that the global economy is an important part of the US economy, and it will continue to play a significant role in the years to come.

And keep this in mind:

Foreign ownership of U.S. debt, which includes both governments and private investors, is much higher now than it was about 50 years ago. In 1970, total foreign holdings accounted for $14.0 billion, or just 5 percent, of DHBP. As of December 2022, such holdings made up $7.3 trillion, or 30 percent, of DHBP. Of that amount, 54 percent was held by foreign governments while private investors held the remaining 46 percent. Because Treasury securities are backed by the full faith and credit of the U.S. government, creditors including foreign investors often view lending to the United States as a safe investment.

P G Peterson Foundation