5 Scary Myths You Probably Believe About the Economy

Pundits love to tell us that the American economy is circling the drain due to the recession and politicians throwing money out the window like it's made of bees. To hear them say it, America is always just on the cusp of a Mad Max-style blasted hellscape.

But in the midst of all that doom and gloom, there are a whole bunch of very smart people saying that things aren't nearly as bad as the inflammatory headlines make it look. We aren't saying they're right (spoiler alert: nobody can actually predict the economy), but there's no reason why we should always assume the pessimists are right, either. So if nothing else, it will improve your mood a bit to hear ...

#5. No, China Isn't on the Verge of Owning America

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What You've Heard:

As hysterical ads like this tell us, American spending is so off the charts that President Obama has to fly to China every year and beg on his hands and knees for the Chinese president to lend America money. With the Chinese owning most of America's debt, it's only a matter of time before China asks for their money back and we all become slaves to the dastardly communists, because that's totally how it works.

BananaStock/BananaStock/Getty Images
"So how much more of this until we're considered even?"

But Actually ...

First of all, China only owns 8 percent of the total U.S. debt. That's probably not enough to repossess Rhode Island, let alone the whole United States. And Washington isn't begging China for money, either. The debt that we owe to China comes from treasury bonds, which are kind of like IOUs, which they buy because it helps to keep China's currency low, which is better for trade. And because they sell so much shit to America, China basically has to buy our debt as a way to unload the trillions of American dollars we're giving them.

Jupiterimages/Goodshoot/Getty Images
"That'll be $4 trillion."

Also, for those worried about China swinging their economic dick around, China can't just recall their debt. First of all, you can't do that with treasury bonds, and even in a fictitious world where you could, it would be economic suicide for China. What, you thought the "debt" was money they lent because they felt sorry for the U.S. and wanted to bail them out, like lending your buddy 30 bucks until payday? No, they buy debt because it's a good deal for them.

And while it's easy to panic about the amount of debt that America owes to other countries, people forget that the U.S. buys other countries' debt too, so much that it almost cancels out the issue. For every dollar the U.S. owes a foreign country, it is owed 89 cents in foreign debt. America actually makes more money off of buying other people's debt than other people make buying theirs. And rest assured, those countries are probably also running terrifying ads about cackling American students making fun of their economy.

Visage/Stockbyte/Getty Images
"One ... two ... three ... fuck Quebec!"

#4. American Manufacturing Isn't Dead

Felipe Dupouy/Lifesize/Getty Images

What You've Heard:

Of all the stuff on your desk right now, how much of it was made in America? How about the clothes on your back? Between Japanese electronics and fabrics made in Asian sweatshops, it seems like we import everything. Mom and Dad will remind you that there once was a time when America ruled the world of manufacturing, but then the cold dark eternal winter came in the form of developing economies stealing all of those jobs.

Nowadays, every factory in America is an abandoned graveyard with a permanent ominous black cloud hanging overhead, and the only thing the Midwest produces is clinical depression.

Jupiterimages/Polka Dot/Getty Images
"Wow, incredible work, Chad! You keep producing like that, and you'll wind up in the big gray office!"

But Actually ...

Although China managed to edge the U.S. off of the top seat in manufacturing in 2012, American manufacturing is still a powerhouse. In fact, America's manufacturing output is stronger than ever -- it has actually doubled since 1970, and is continuing to climb. In fact, U.S. manufacturing broke record profits in 2011, and manufacturing output is currently 35 percent above pre-recession levels. It just takes fewer people to make all of that stuff because of robots. If you want to get mad at somebody, get mad at them.

Digital Vision./Digital Vision/Getty Images
Seriously, get mad at them ... while you still have the chance.

So why can't you find anything in your house that's made in America? Because America makes supercomputers and jumbo jets, while countries like China produce all of your cheap consumer stuff. Cheap-labor countries base their manufacturing on having a ton of people who can sit in factories for 18 hours a day assembling iPods. America's manufacturing is centered on its high intellectual capital, which produces more skilled workers able to make far more advanced things with far fewer people. It's estimated that American workers are almost six times more productive than Chinese workers. That's why, in 2009, American manufacturing produced more than China with less than half the workers.

And while the recession may have wreaked havoc on Detroit, the auto industry is also coming back with a vengeance. As of now, the auto industry is on track to reach its record-breaking 2007 sales, and the two companies that received government bailouts have paid them back. It won't result in as many high-paying union manufacturing jobs as the "good old days" because, well, we've gotten way more efficient at making things. There could be worse problems to have, right?

Stockbyte/Stockbyte/Getty Images
"For instance, the position of 'sparks shooter' used to take six men. Now, our sparks-shooting technology just requires one."

#3. Illegal Immigrants Appear to Be Helping the Economy

Ablestock.com/AbleStock.com/Getty Images

What You've Heard:

You've heard the argument from political demagogues and your racist uncle alike -- every year, thousands of illegal immigrants pole vault over the southern border and run free in these United States, feeding off the government teat. Once here, not only do they take jobs from honest, hard-working Americans, but they also suck all the money out of social services and don't pay taxes. It's obvious that, if we ever want to get out of this economic slump, we have to round each and every immigrant up, ship 'em all back to Mexico (even the ones that didn't come from Mexico), and fortify the American border with lasers and electric eels.

David McNew / Staff / Getty
Also snake cannons. Halliburton's heavily invested in rattlesnakes.

But Actually ...

The idea is that these impoverished people cross over, live off the grid, and soak up America's precious tax dollars. But actually it's estimated that illegal immigrants pay $15 billion a year into social services and only take $1 billion out of it. Social services actually relies on illegals' taxes to help the system remain solvent.

How the hell is that possible? Well, for one thing, you can't exist in America without paying taxes -- just by living here and buying things, you're paying sales and property taxes. It's true that some immigrants aren't paying income taxes (in America, if your income is low enough, you aren't paying taxes anyway), but somewhere between 50 percent and 75 percent are. On the other hand, very few illegals are able to benefit from Social Security because it's really hard to get it without a legitimate Social Security number.

Comstock/Comstock/Getty Images
"I'm sorry, sir, but 'four' is not an acceptable Social Security number."

And then you have the "they're taking our jobs" narrative, but for the most part, illegal immigrants are taking jobs that Americans just won't do -- farmers who want to hire Americans are often unable to find people willing to do the work. In Alabama, after they enacted tough new laws to drive out the illegal immigrants, the poultry industry went into crisis because legal Americans would rather be unemployed than spend their days carving up chicken parts.

Then there's the argument that illegals drive down wages, because they're basically willing to work for peanuts, right? Well, it's true that illegal immigrants lower wages somewhere between 0.4 percent and 7.4 percent for low-skilled workers, but for the rest of America, there is virtually no impact on wages. In fact, immigrants actually increase the income of American families a small amount. By taking on the grunt work that Americans don't want to do, immigrants free up skilled workers to do more of the work that they're paid higher wages for.

Digital Vision./Photodisc/Getty Images
Like "gold coin shirt screamer."

Boil it down, and the majority of economists agree that illegal immigrants have a net positive effect on the economy. Which seems hard to argue against -- if they're "taking our jobs," it means they're working, and getting paid, and spending that money. That isn't bad for the economy -- that is the economy.

But while we're stepping into hot-button issues ...

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