TRANSCRIPT:
(Image Source: Politically Illustrated)
BY EMOKE BEBIAK
ANCHOR ALEX ROZIER
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multisource business video news analysis from Newsy.
Mark your calendar for 2016. That’s
when the International Monetary Fund expects America
to surrender its leading position as world’s largest economy to China
It was Marketwatch’s Brett Arends who discovered the grim
prediction buried deep in an IMF report.
“When you talk to a lot of Wall
Street economists and talking heads, they will tell you, ‘Oh, it’s decades
away’ and all that stuff. Nonsense. It is five years’ time. 2016. That is the
date put out by the IMF.”
In the original article, Arends
warns...
“Most people aren’t prepared for
this. They aren’t even aware it’s that close. … The most bearish will put the
figure in the mid-2020s. But they’re miscounting. They’re only comparing the gross
domestic products of the two countries using current exchange rates.”
Arends explains using exchange rates
is not a reliable basis for predictions, because they change easily and
governments can manipulate them. Instead, the IMF compared the two country’s
“purchasing power parities” or PPPs, which measures how much someone’s income
can buy in a given economy.
Looking at the current trends, IMF
concludes China ’s rising PPP
will top that of the US
But a blogger for The Financial Times points out IMF has put out
conflicting reports based on what numbers they analyze.
“Statistics are notoriously slippery
things… Measured using PPP, China
will overtake the US US
The International Business Times denies the legitimacy of the
recent report saying...
“The IMF and World Bank’s projections
... shouldn’t be trusted at all. Economists at institutions like the IMF and
World Bank have little imagination and assume that current conditions will
continue indefinitely. Their ‘projections’ should be more aptly named ‘adjusted
extrapolations’.”
CNN asks what slipping to the second
place would mean for the US
CNN’s Zain Verjee explains it would
have serious implications for everyday Americans.
“For ordinary people though, Carol,
one of the issues is going to be jobs. You know, if the US economy grows around 2 percent, less people
are going to want to invest their money in the US
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