Stimulus had little effect on the economy
The Fed announced recently that it was ending the largest ever Keynesian experiment of quantitative easing that created fiat money to buy U.S. Treasury bonds and mortgage backed securities. More than $4 trillion of stimulus had little effect on the economy. After six years, 29 states have fewer jobs than in 2008.
Economic growth was concentrated in the energy industry. At the center of the recovery Texas added 1.1 million jobs benefiting from developments in fossil fuels production technology. Without Texas the country would be 350,000 jobs below the 2008 peak. North Dakota's Bakken oil field plus natural gas fracking in Oklahoma, Ohio and Pennsylvania added to job growth as well as reviving the steel fabrication industries for drill pipe and rail cars to transport crude from North Dakota. In addition to job creation, the new crude and natural gas production has drastically reduced the foreign exchange drain that is starving the nation's economy. This increased domestic crude production has caused a 25 percent drop in crude oil prices over the last four months, which will benefit every consumer directly and indirectly with lower energy costs.
In spite of the increased U.S. petroleum production, where imports fell to the lowest level since 2009, the deficit is growing wider. September imports of manufactured products from China increased 13 percent to an all time high, and the trade deficit rose to $35 billion — also a record. Exports to Europe swung from a 4 percent increase in August to a 7 percent drop in September.
Our trading partners practice mercantilism — maximizing exports and restricting imports — while we naively continue a free trade policy. We allowed imports of consumer goods without reciprocity which resulted in massive job losses since 1970. The U.S. continually runs a current account deficit, which was $400 billion over the last 12 months. Germany and China dominate European and Asian economies with current account surpluses of $280 billion and $170 billion respectively during the same period. Simplistically, the moribund U.S. economy is suffering an annual loss of cash that is about equal to gains by the world's two strongest economies.