My good friend and Roosevelt University colleague Steve Balkin -- with whom I have substantial but always-friendly political disagreements -- has suggested I post this modest proposal. Comments are welcome.br /br /emstrongSell Michigan to China: Financing a US Economic Recoverybr /br /----By Steve Balkin, Professor of Economics, Roosevelt University, October 17, 2008br /br /Sell Michigan to China – that is what I'm proposing as a way to finance the economic recovery for the US. Think of it. Both countries could benefit.br /br /Michigan is now a failed state. Of all the 50 states, it has the highest unemployment rate of 9% in August 2008. Its largest city, Detroit, has the highest crime rate of any US City. Real estate values have been dropping precipitously, and the state and local governments are experiencing hemorrhaging budget deficits. There is an abundance of empty land, empty factories, and abandoned buildings. These people are leaving the state to move where they can more likely find work.br /br /China has its economic and social problems too. A major problem in China, as the Chinese themselves express it, is "it has too many people", 1.3 billion, over four times the population size of the USA. Managing its environment, creating a safety net, and continuing its high rate of economic growth to create jobs in the cities for its vast underemployed rural population are daunting tasks that China fails at as much as it succeeds. China expects it can eventually capture a major share of the global auto industry and hopes that more of its population will learn English to fit into the advanced global economy.br /br /A lot of our debt is held by China, the country we trade with the most after Canada. China holds about a half a trillion in U.S. Treasury securities and has foreign exchange reserves totaling about $1.5 trillion. When an individual is in debt, there are basically five options: save to redirect consumption to pay down debts, work more to generate extra income, reschedule debts, find a friend or relative to pay your debts for you, sell assets, or default. I am suggestingbr /the US sell some assets.br /br /So, I did a thought experiment to consider this option, sell Michigan to China. This will settle up with them -- cancel our debt with them -- as well as bring their economic might, thrifty people, and manufacturing prowess to North America -- in addition to a lot more Chinese restaurants. Michigan would become a hybrid state similar to Hong Kong, now a Special Administrative Region of China. English andbr /Mandarin would be the official languages. If this idea is too shocking, then we could instead just lease Michigan to the China for 99 years. br /br /Michigan was originally Native American, heavily Chippewa and Iroquois, whose ancient ancestral roots are in Asia. Later Michigan became French; then British; then part of the USA; and with this financing strategy, will become Asian again.br /br /There is American precedent for this strategy. In 1803, Napoleon Bonaparte was fiscally in trouble due to his adventurous foreign wars. So he had to sell the French North American territory of Louisiana which now contains all or part of 15 US states in the center of North America. The price was about 20 million dollars, half in cash and half in debt cancellation.br /br /As part of the deal to create a Special Administrative Chinese Region of Michigan in North America, China would have to agree to abide with the international North American regulations set up by the USA and Canada such as those of the Great Lakes Commission and NAFTA. People in Michigan, could stay and retain their property rights or sell to the Chinese and move elsewhere. Of course, people in Michigan would have to approve their transfer to China. If approved, China would be sending millions of its people (perhaps 10 to 50 million) to live in its new North American region buying up residential and commercial property, starting new factories, recovering old jobs and creating new ones, and re-populating Detroit. It would be expected that joint partnerships and ventures would be formed between Chinese automobile corporations and the Big Three, injecting capital, manufacturing know-how, and access to the soon to be largest green auto market in the world – China. Math scores at Michigan schools would shoot to world standards.br /br /My family moved to Michigan in the 1950s because of the economic boom there. Michigander families of today would likely want to stay and welcome the economic and social renaissance of their state. I think Chinese people would personally enjoy moving to and vacationing in Michigan. I think they would enjoy its natural beauty, the clean air and water (up north), the Blues and Jazz heritage, the culturally richbr /ethnic enclaves of African-Americans, Mexicans, Polish, and Arabs; the prowess of its sports teams, its museums, universities, and casinos; and its indigenous foods such as Coney Island hot dogs, Detroit style pan pizza, grilled onion laden sliders, and Yooper meat pasties.br /br /A side benefit of this is a demonstration that borders of nation states can be fluid. The USA and China are already bound together in a marriage of economics. It would be advantageous for China to have a region in North America (in the Midwest right between Canada and the USA) and it would be advantageous for the USA to be relieved of much of its foreign debt so it can pay for the finance industry bailout as well as better education, universal access to health care, and an improved infrastructure.br /br /Selling Michigan to China would show the world that it is economic and cultural exchanges that define a place and not its borders. It would demonstrate that expending resources to fight over sovereign borders is wasteful and that in its place, cooperation and exchange, for goods and services and also debt removal for land, is not only peace-promoting but also economically smart. Both China and the USA have their faults. People in the USA can learn a lot from China and the Chinese can learn a lot from the USA. Bringing part of China into the heartland of North America is a way to foster and accelerate that process of bilateral learning and getbr /America moving ahead./strong/em