The Fish Tank Economy

In this blog I will being calling “The United States of America”, America or the US.

America the Fish Tank

Imagine the United States as a massive fish tank.  The water inside represents the money circulating through the economy, flowing through households, businesses, banks, and government programs.  The fish in the tank represent our citizens, relying on that water to breathe, survive, thrive, and grow. But what happens when we see the water draining faster than being filled?

Evaporation without Rain

In a healthy system, “water that leaves the tank” should eventually return through imports, foreign investment, tourism, or repatriated profits.  But increasingly, the return flow is weak, and the tank is leaking faster than it’s being refilled.

What happens when the Water Starts Leaking out of the Tank?

  • Leaks in the Tank: Money Leaving America and not coming back

Every time money is spent on imported goods, outsourced labor, foreign investments, or international aid, represents a tiny amount of water escaping the tank without replenishment.  Some of this is beneficial, global trade can bring prosperity, but when the outflow far exceeds the inflow, the tank could approach drying up.

“In the News”

(1) Offshoring Profits

Multinational corporations often shift profits to countries with lower taxes, keeping earnings outside the U.S.

Apple: Keeping $26 billion in taxes out of America

  • Between 2009 and 2012, Apple earned $74 billion in profits from sales outside the Americas.  Instead of recording this income in the U.S., Apple attributed it to Irish subsidiaries that paid less than 1% in taxes.  If Apple had booked those profits in America, it would have owed up to $26 billion in taxes (based on a 35% corporate tax rate at the time).

(2) Foreign-Owned U.S. Assets

Interest, dividends, and rents paid to foreign owners of U.S. real estate and businesses send money abroad.

Saudi Arabia: Through its Public Investment Fund (PIF)

Major companies, from foreign countries, like Kingdom Holding Company, has invested in luxury hotels, commercial real estate, and tech firms.  Saudi Arabia invests in U.S. assets like real estate (e.g., Four Seasons Hotel NYC) and businesses (e.g., Uber, Lucid Motors).  These assets generate income which the bulk is paid to the Saudi owners (often 90–95%) with only a small portion (e.g., 5–10%) is taxed in the U.S.

  • Rent from tenants
  • Dividends from company profits
  • Interest from financial holdings

(3) Remittances

Immigrants working in America often send money back to family, schools, and friends in their home countries that is certainly a compassionate act, but another massive outflow.

Remittances to Mexico: A One-Way Flow of Billions, in 2024

Mexican immigrants living and working in the U.S. sent $62.5 billion back to Mexico which accounts for 96.6% of all remittances Mexico received that year.  They sent this electronically via 151 million transactions, averaging about $395 per transfer, primarily coming from California and Texas.

(4) Living Abroad and Working in America

Living Abroad, earning in America is an invisible and substantial drain.  There’s a growing group of individuals who work in America and live in another country.

The Cross-Border Commute to and from Mexico

Every day, thousands of individuals cross the border from Tijuana to San Diego to work in the America, legally or illegally.  After earning wages in California, they return to Mexico at night, where they:

  • Own/Rent homes
  • Buy groceries
  • Pay for utilities
  • Register vehicles
  • Buy gasoline
  • Spend nearly all their income

(5) Outsourcing: Exporting Jobs, Importing Dependency

When American companies outsource software development, customer service, and other operational tasks to foreign countries with cheaper labor, they reduce domestic employment opportunities and send wages abroad.  While outsourcing can cut costs for businesses, it also means that the money paid for these services exits the American economy and rarely returns.

Concentrix outsources operations, that would translate to $1.4 to $1.9 billion annually to the Philippines

The salaries paid to those workers stimulate foreign economies not America’s.  Over time, this practice erodes the domestic job market and contributes to a hollowing out of middle-class employment.

(6) Trade Deficits

When America imports more from a single country than it exports, dollars flow out to other countries without a proportional return.

China: $111.47 billion trade deficit

  • America Exports to China = $56.01 billion
  • America Imports from China = $167.48 billion

(7) Foreign Aid

America is one of the most generous nations in the world, both through government foreign aid and private charitable giving.  Billions of dollars are filtered out of America annually to support disaster relief, education, infrastructure, and health programs in other countries.  While these efforts reflect compassion and global leadership, they also represent a one-way flow of resources.  American charities raise funds domestically and spend them abroad, with little to no economic return.  These gifts don’t generate income, jobs, or growth within the U.S. economy they simply help to “drain the tank”.

Charity Dollars That Never Came Back: The Clinton Foundation and Haiti

After the 2010 earthquake in Haiti, international donors pledged over $13.3 billion in aid, with the Clinton Foundation played a central role in managing and distributing these relief funds.  Bill Clinton was appointed co-chair of the Interim Haiti Recovery Commission (IHRC), and Hillary Clinton, then Secretary of State, oversaw USAID spending.  The Clinton Foundation itself raised over $30 million for Haiti relief projects.  However, reports and investigations revealed that only a fraction of the money reached Haitian citizens or infrastructure. [from an www.latintimes.com article]

(8) Healthcare

American doctors, nurses, and medical organizations often travel overseas to provide free surgeries, medications, and care for groups or individuals that do not seek out care locally or regionally.  These missions work to improve global health, but they also contribute to population growth and increased demand in foreign countries without strengthening America’s own healthcare system.  As these supported populations grow and stabilize, they may eventually compete for global resources, jobs, and migration opportunities.  Meanwhile, the U.S. healthcare system faces staffing shortages, rising costs, and limited access for its own citizens.

(9) Alliance Imbalance

Another significant leak in the fish tank is the disproportionate spending by the U.S. on military alliances, particularly NATO.  While alliances are meant to share responsibilities and costs, the reality is that America often pays far more than its partners, subsidizing their security while they invest in domestic priorities.

The NATO Spending Gap

NATO members agreed in 2014 to spend at least 2% of their GDP on defense, yet many of our wealthiest allies failed to meet this standard.  According to a 2025 analysis by the Heritage Foundation, European NATO members collectively underfunded their defense by $827.91 billion since 2014 nearly equal to the entire annual U.S. defense budget. [www.heritage.org]

  • Germany: Shortfall of $249 billion
  • Italy: Shortfall of $150 billion
  • Spain: Shortfall of $150 billion

(10) Educating the World

America’s higher education system is among the best in the world — and it’s also generous.  Many universities offer tuition-free or heavily subsidized education to international students through scholarships, fellowships, and aid programs.  While this fosters global goodwill and cultural exchange, it also creates another leak in the fish tank: the export of talent and investment.  While these outcomes are admirable, the economic return to the U.S. is minimal. The investment — often tens or hundreds of thousands of dollars per student — leaves the tank and doesn’t circulate back.

Berea College in Kentucky and the Curtis Institute of Music in Philadelphia offer tuition-free education to all international students

These students often receive full scholarships covering tuition, room, and board, funded by endowments or government grants.  After graduation, many return to their home countries, where they: [studyeagles.com]

  • Start businesses
  • Join government agencies
  • Teach at universities
  • Contribute to local economies

(11) Intellectual Property Theft

The United States is arguably the global leader in innovation. From cutting-edge software and pharmaceuticals to aerospace engineering and entertainment the US often leads the pack.  Intellectual assets are among the most valuable “nutrients” in the fish tank, providing “oxygen” to economic growth, job creation, and global influence.  When foreign entities steal or copy American IP, without licensing or royalties, it’s another form of financial leaks ans one that’s almost ignored by the press, but deeply corrosive.

Corporate Fraud: IP Theft

  • Reverse-engineered American products
  • Pirated software, films, or music
  • Replicated patented technologies
  • Use stolen trade secrets to build competing products

A Specific Example: Chinese IP Theft in Tech and Defense

Foreign corporate fraud often involves intellectual property theft, which silently siphons billions from American innovation.  In a high-profile case, Huawei, a Chinese tech giant, was accused of stealing source code and trade secrets from U.S. companies like Cisco and T-Mobile.  According to a 2023 report by the U.S. Trade Representative, China is responsible for up to 80% of all IP theft targeting American firms.  This stolen tech was then used to develop their owns which were products sold globally — often at lower prices due to government-subsidized production and lack of R&D costs. [www.justice.gov]

(12) Medical Travel

In recent years, a growing number of Americans have opted to venture abroad for medical procedures like dental work or cosmetic surgery to major operations like joint replacements or heart bypass.  This trend, known as medical tourism, is often driven by cost savings, shorter wait times, or access to treatments not available in the U.S.  While these decisions may make financial sense for individuals, they represent another economic leak in the fish tank.  Instead of circulating money through American hospitals, clinics, and pharmacies, these dollars flow into foreign healthcare systems.

According to the Medical Tourism Association, over 1.9 million Americans traveled abroad for medical care in 2024, spending an estimated $15–$20 billion outside of America.  Popular destinations include Mexico, Costa Rica, Thailand, and India which are countries where procedures can cost 30–70% less than in the U.S.

A dental implant costs $3,000–$5,000 in the U.S. may cost just $800–$1,200 in Mexico

  • Impact: These savings are appealing, but they also mean American healthcare providers lose revenue, and local jobs and tax dollars vanish.

(13) Expatriates and Retirement Abroad

Another growing trend is for Americans to retire abroad, lured by lower costs of living, warmer climates, and reduced taxes.  While this may offer a better quality of life for the same funds, it also represents a long-term outflow of wealth — especially when pensions, Social Security, and retirement savings are spent in these foreign countries.

A retiree receiving $2,000/month in Social Security may spend $24,000/year in a foreign land

Why this matters is because of reduced domestic consumption, lower demand for U.S. goods and services with fewer contributions to local economies and communities.  Over time, this trend can hollow out small towns and cities, especially in regions that rely on retirees for economic stability.

Evaporation

Theft, Frauds, and Scams: Invisible Hands Draining the Tank

While trade deficits and offshoring are visible leaks in America’s economic fish tank; theft, fraud, and scams are like evaporation; harder to detect but equally damaging overall.  These criminal activities extract billions from our system annually, often without the public realizing the scale or impact.  From cybercrime and identity theft to corporate fraud and government scams, the cumulative effect is a quiet erosion of trust, wealth, and stability.

Cybercrime: Russian Nationals Behind Phobos Ransomware

Foreign cybercriminals have increasingly targeted American institutions with ransomware attacks.  In 2025, the U.S. Department of Justice charged Roman Berezhnoy and Egor Glebov, Russian nationals, for operating the Phobos ransomware group, which extorted over $16 million from more than 1,000 victims, including U.S. hospitals, schools, and businesses.  These attacks encrypted critical data and demanded payment for decryption keys, draining funds from American organizations and forcing costly recovery efforts. [www.justice.gov]

Government-Related Scams: International Scam Compounds Defrauding Americans

Foreign scam networks have also targeted U.S. government programs and citizens directly.  In 2025, Senator John Cornyn introduced S.2950, a bill aimed at combating international scam compounds operated by transnational criminal organizations.  These foreign-run operations have defrauded Americans through fake investment schemes, fraudulent aid applications, and impersonation tactics — often using U.S. federal funds or targeting vulnerable citizens.  The bill seeks to hold these foreign entities accountable and prevent further economic leakage. [www.congress.gov]

  • S.2950:  The bill, officially titled “A bill to require the Secretary of State and relevant executive branch agencies to address international scam compounds defrauding people in the United States, to hold significant transnational criminal organizations accountable, and for other purposes”

Consumer Scams: India-Based IRS Impersonation Ring

One of the most damaging consumer scams involved call centers in India impersonating IRS agents.  Between 2013 and 2022, over 16,000 victims in the U.S. lost more than $85 million to these scams.  The callers were threatened with arrest unless immediate payments were made via gift cards or wire transfers.  In one case, Ladda Boonlert, a Nevada resident, was sentenced for her role in collecting payments for Indian conspirators, who tricked over 2,700 Americans into sending more than $2.4 million. [www.tigta.gov]

Cryptocurrency: The Digital Drain That Bypasses Borders

Since 2010, cryptocurrency has represented a new and rapidly growing leak in America’s economic fish tank.  This one that’s harder to detect, regulate, or reclaim because unlike traditional financial systems, crypto operates on decentralized networks, allowing individuals and entities to move wealth across borders without banks, governments, or oversight.

How Crypto Drains the Tank

Offshore Wallets and Exchanges: Many Americans buy and hold cryptocurrency on foreign platforms (e.g., Binance, KuCoin), where their assets are stored outside U.S. jurisdiction.  When profits are realized, they may never return to the U.S. economy.

Unregulated Transactions: Crypto enables peer-to-peer payments that bypass taxation, banking fees, and reporting requirements.  This means billions in potential tax revenue and economic activity can vanish into digital wallets.

Crypto Mining Abroad: While some mining occurs in the U.S., much of it is concentrated in countries with cheaper electricity (e.g., Kazakhstan, Russia, Venezuela).  The rewards, being newly minted/mined coin, often go to foreign operators, draining value from the U.S. economy.

Ransomware and Illicit Use: Cybercriminals frequently demand ransom payments in cryptocurrency, which are then laundered through mixers or foreign exchanges.  These attacks that often target American hospitals, schools, and businesses result in direct financial loss and costly recovery efforts.

Scale of the Drain: According to a 2024 report by Chainalysis:

  • Over $50 billion in crypto assets were transferred from U.S.-based wallets to offshore exchanges
  • Ransomware payments in crypto exceeded $1.2 billion globally, with the majority of victims located in the U.S.
  • Tax evasion via crypto is estimated to cost the U.S. Treasury $11 billion annually

Why It Matters

Cryptocurrency is not inherently harmful as it offers innovation, financial inclusion, and new economic models.  But without robust regulation, transparency, and repatriation incentives, it becomes a digital siphon which quietly drains wealth from the tank without replenishment.  Unlike traditional leaks, crypto flows are invisible, instantaneous, and borderless, making them one of the most difficult leaks to plug.

Conclusion

The metaphor of America as a fish tank reveals a sobering reality: while the tank once brimmed with flowing wealth, it has become riddled with leakages that quietly and steadily drain its prosperity.  From trade deficits and offshored profits to foreign-owned assets and remittances, the outflow of money is no longer balanced by a strong return.  These are not just theoretical economic trends as they represent real concerns for American workers, communities, the U.S. government, and long-term national strength.  When the water level drops too far in the tank, the fish (our citizens) will struggle taking breathes. When will this be?

Restoring balance is a place to focus our thoughts.  America ought to rethink how it manages its economic ecosystem by investing in domestic production, incentivizing the repatriation of profits, strengthening fair trade policies, and ensuring that the benefits of globalization don’t come at the cost of national sustainability.  The leaks do not appear easy to plug but recognizing them is the first step toward repairing the tank. If we want the fish to thrive, we must make sure the water stays and flows where it’s needed most.

Citations for this Blog

Trade Deficit with China

Apple Offshore Profits & Tax Avoidance

  • Apple paid effective tax rates as low as 0.005% in Ireland and was ordered to pay over $14 billion in back taxes.
    ICIJ [icij.org]

Saudi Arabia Public Investment Fund (PIF) U.S. Assets

  • Saudi Arabia’s PIF invested hundreds of millions in a Manhattan skyscraper, taking a two-thirds stake.
    AGBI [agbi.com]

Remittances to Mexico

Cross-Border Commute: Tijuana to San Diego

Outsourcing: Concentrix in the Philippines

Clinton Foundation & Haiti Earthquake Aid

NATO Defense Spending Gap

Berea College Tuition-Free for International Students

  • Berea College provides 100% funding for tuition, housing, food, and fees to all enrolled international students.
    Berea College [berea.edu]

Curtis Institute of Music Tuition-Free for International Students

Huawei IP Theft & U.S. Trade Representative Report

  • China responsible for up to 80% of all IP theft targeting American firms, according to a 2023 U.S. Trade Representative report.
    USTR [ustr.gov]

Medical Tourism

  • Over 1.9 million Americans traveled abroad for medical care in 2024, spending an estimated $15–$20 billion.
    Statista [statista.com]

Cryptocurrency Outflows

Leave a Reply