MarketWatch: How Globalization Sunk Many Americans Deeper in Debt

International trade has uneven effects for regions of the United States and was particularly damaging for communities that relied on manufacturing – with high rates of underemployment, unemployment and debt. Household debt in the United States doubled from 2000 to 2007, peaking at $13 trillion in 2008, and nearly a third of US household debt could be attributed to import competition and globalization, explains Erik Loualiche of MIT for MarketWatch. “As factories shut down and manufacturing jobs were shipped overseas, many Americans – especially blue-collar laborers without a college degree – found themselves without a paycheck. So they borrowed to make ends meet.” Economists recognize that international trade is not uniformly positive for global growth, and globalization has both winners and losers. Commenters on the essay point to automation and artificial intelligence as another looming challenge. Loualiche urges governments to anticipate such economic challenges and develop policies to reduce the impact, striving to replace lost jobs and reduce household debt. Consumers insist on low prices, and looking backward is not an option. – YaleGlobal