CAFTA Should Be Rejected, Just Like the EU Constitution

Eco Logic Powerhouse ^ | 15 Jul 05 | Phyllis Schlafly

[datura]

Since democracy is the worldwide goal of the Bush Administration, we must face the stunning fact that the integration of different nationalities under a common European Union (EU) Constitution was rejected by decisive democratic votes. President Bush can thank conservative leaders for saving him from the embarrassment of endorsing the EU Constitution, shortly before it was so soundly defeated in France and the Netherlands.

The EU Constitution was defeated, because Western Europeans don't want to be politically, economically, or socially integrated with the culture, economy, lifestyle, or history of Eastern Europe and Muslim countries. Western Europeans recognized in the proposed EU Constitution a loss of national identity and freedom, to a foreign bureaucracy, plus a redistribution of wealth from richer countries to poorer countries.

Will the political and business elites in America hear this message, and stop trying to force CAFTA (Central America Free Trade Agreement) on America?

The Senate Republican Policy Committee appears to be tone deaf. Its just-released policy paper argues that CAFTA should be approved, because its purpose is "integrating more closely with 34 hemispheric neighbors - thus furthering the Free Trade Agreement of the Americas (FTAA)," which the 2001 Quebec Declaration declared would bring about "hemispheric integration."

Americans don't want to be "integrated" with the poverty, corruption, socialism, and communism of our hemispheric neighbors, any more than the French want to be integrated with the Turks and Bulgarians.

Just as the French and Dutch were suspicious of the dangers lurking in the 485-page EU Constitution, Americans are wary of the dangers hiding in the 92-page CAFTA legislation, plus the 31 pages that purport to spell out the administrative actions the U.S. must take in compliance. No wonder CAFTA's supporters are bypassing our Constitution's requirement that treaties can be valid only if passed by two-thirds of our Senators.

The Senate Republican policy paper argues that CAFTA "will promote democratic governance." But, there is nothing democratic about CAFTA's many pages of grants of vague authority to foreign tribunals, on which foreign judges could force us to change our domestic laws to be "no more burdensome than necessary" on foreign trade.

We have had enough impertinent interference with our lives and economy from the international tribunals Congress has already locked us into, such as the WTO (World Trade Organization) and NAFTA (North American Free Trade Agreement). Americans don't want decisions from another anti-American tribunal any more than the French and Dutch wanted their lives micro-managed by Belgian bureaucrats.

The EU political elite ridiculed the French and the Dutch for not realizing that globalism is on the march, and we should all get on the train before it leaves the station. The French and Dutch woke up to the fact that the engineers of the EU train are bureaucrats in Brussels and judges in Luxembourg, who invent regulations and judge-made laws, without so much as tip of their hats to democracy.

The pro-EU political bosses blamed the "non" vote by the French on worry about losing their jobs to the cheap labor of Eastern Europe and Turkey. But the worry was grounded in reality, and Americans are likewise correct, to worry about how CAFTA will put U.S. jobs in competition with low-wage Central America, where the average factory worker is paid about one dollar an hour.

CAFTA would even prohibit U.S. states from giving preference to American workers when taxpayer-funded contracts are granted.

CAFTA is not about free trade; it's about round-trip trade. That means multi-national corporations sending their raw materials to poor countries, where they can hire very cheap labor and avoid U.S. employment, safety and environmental regulations, and then bringing the finished goods back into the United States duty-free, to undersell U.S. companies that pay decent wages and comply with our laws.

The promise that CAFTA will give us 44 million new customers for U.S. goods is pie in the sky, like the false promise that letting Communist China into the WTO would give us a billion-person market for American agriculture. Or, the false promise that NAFTA would increase our trade surplus with Mexico to $10 billion when, in fact, it nosedived, to a $62 billion deficit.

Knowing that Americans are upset about Central America's chief export to the U.S., which is the incredibly vicious MS-13 Salvadoran gangs, the Senate Republican policy paper assures us that CAFTA will diminish "the incentives for illegal immigration to the United States." That's another fairy tale, like the unfulfilled promise that NAFTA would reduce illegal aliens and illegal drugs entering the U.S. from Mexico.

By stating that CAFTA means the implementation of a "rules-based framework" for trade, investment, and technology, the Senate Republican policy paper confirms that free trade requires world, or at least hemispheric, government. You can't have a single economy, without a single government.

CAFTA may serve the economic interests of the globalists and the multinational corporations, but it makes no sense historically, Constitutionally, or democratically. Americans will never sing "God Bless the Western Hemisphere" instead of "God Bless America."

[Paul Ross]

Trade agreements concluded that way are a fraud on the Constitution.

Absolutely dead right.

Unfortunately, I would not dare bring the case challenging this until Justices O'Connor, and Stevens are gone. And if only we could hurry-up the exits of Ginzburg and Kennedy. Unfortunately, we are likely stuck with Souter and Breyer for a long time.

[Paul Ross]

Bwahahaha! Gotcha!

Watch out. It's not nice to fool Mother Nature!!!

[Paul Ross]

You ignored my question on NAFTA, so conversation over.

Which "question" was that? The illogical, rhetorical one, that can't be answered, but does not in any way defeat the position you attack? I.e.,

So tell me, how much soveriegnty has been lost due to NAFTA?

Lots. Bunches. Does that help you? How do you quantify a loss of liberty, a loss of constitutional integrity? A loss of loyalty by our own politicians? If you have a measure, that should prove extremely interesting.

I could take a stab at some impacts: How about its direct impacts on illegal immigration, i.e., an outright invasion across our borders?

Can you name any specific examples? Has Canada foisted it's healthcare system on us or has Mexico compelled us to start having ciestas?

Freeper Tomatoealive posted a cogent summary of the socialists interim global agenda, Here, as reprinted below:

Historians are known to label a year by hindsight, but 2005 was targeted as a year for a big decision back in 1994 at a Miami Summit of the Americas. Thirty-four nations whose elite attendees had a mind-set for the demise of sovereignty planned a piecemeal replacement of our republic with a regional government controlled by international bureaucrats and world courts.

One of the bigwigs at this affair was Bill Clinton, having received his unction from David Rockefellar and his cohorts of the Council on Foreign Relations, targeting 2005 for congressional passage of the Free Trade Area of the Americas.

At the 2003 summit, details were fine-tuned for CAFTA, the Central American Free Trade Agreement, planned to help expand the North American Free Trade Agreement, the three-nation pact that has outsourced our industrial base. Few have heard of CAFTA, the steppingstone for FTAA, which will congeal every independent nation in our Western Hemisphere into a bureaucratic monstrosity patterned after the European Union.

These so-called trade pacts are a fraud. Free trade by simple word study means removing government controls. But these international agreements have voluminous regulations and international agencies and courts with jurisdiction over education, health care, law enforcement, infrastructure, energy and environment.

What does our 4-to-5-page Constitution restrict? Government! Any change and increase in powers of the government can only be done by constitutional amendment. Yet the FTAA is an open-ended process with already thousands of pages of regulations. International agreements would regulate every area of life: world government composed of regional trade blocs.

NAFTA started with the U.S., Canada and Mexico. CAFTA would add all six Central American countries. FTAA would totally entangle all 34 nations in the Western Hemisphere, excepting Cuba, for now.

People should contact Congress without delay by calling 1-877-762-8762

[Mase]

How much of the economy is now actually sustained by too much debt, masking off the adverse fundamentals?

Thanks for the all the colorful charts. Like every economic Eeyore, you live in a very gloomy place.

Since quitting Prozac you must have missed the fact that the economy is rapidly expanding, inflation is low, unemployment is low, interest rates are low and wages are high. In spite of all this good news you're trying to sell the idea that everything is bad (or going to be that way soon). Is it really all just a mirage?

Thankfully, your protectionist/isolationist message has little appeal outside the usual third-party types. Must be pretty frustrating to know so much yet receive so little affirmation. Pat Buchanan feels your pain.

From Forbes:
The idea that Americans are overspenders and undersavers and addicted to debt is all myth. Household balance sheets have never been more robust. Last year Americans increased their financial assets--checking accounts, money market funds, mutual funds, IRAs, etc.--by an impressive $590 billion. Credit card debt in-creased a paltry 4%. Take our financial household assets (not counting houses and other tangible assets such as automobiles and jewelry) and subtract liabilities such as mortgages and credit card debt, and the American consumers' total financial net worth comes to an eye-popping $26.1 trillion. Consumers today have more than $4 trillion in savings accounts, more than $1 trillion in checking accounts and directly hold another $10 trillion in equities and mutual funds. Their life insurance and pension assets are in excess of $10 trillion. To put it in perspective, Americans' total debts, including mortgages, are dwarfed by their liquid assets.

Our per capita liquidity exceeds that of Japan, a nation noted for its high savings rate. As Bear Stearns' brilliant economist David Malpass notes, "The U.S. household sector is the world's biggest net creditor."

Why the bum rap for America's savings rate? Because of the crazy way our government computes that number. Washington leaves out of the household income number such items as realized capital gains and payments from pension plans and 401(k)s. As for consumption, long-lived assets such as autos and furniture are treated as if they were disposable pens. As Malpass puts it, "Consumption includes education. The absurd result: Spending less on education would raise the ‘personal savings rate,' even though it would reduce future U.S. growth."

This is why, in reality, consumers added $590 billion to their savings last year, while the government reported total consumer savings to be a paltry $100 billion.

Corporate America is also in excellent financial shape, with cash and liquid assets exceeding short-term debt by nearly$2 trillion.
Forbes

In 1959, 62% of Americans owned homes or about 110 million people. Today, 70% of Americans own homes or 206 million people. Americans have more home equity now than any at any other time in history. This has happened even though median home prices have risen dramatically. You're trying to tell us that all this occurred while wages and purchasing power were falling?

I don't know Paul. I read articles like the one from Forbes and then look around me and see all the wealth we've achieved in this country and I wonder where it is you live.

[Paul Ross]

And if you were really interested in OUR prosperity, you would be supporting DR-CAFTA because the only effect it hsa is reducing tarriffs for American exports to the free, democratic nations of the Carribean. The rest of what you've stated has jumped the tracks of any kind of logic chain.

I, in turn, can point out that your "logic" is rather dubious, as the U.S. ITC (International Trade Commission, a U.S. agency) has computed the results of implementing CAFTA on our trade balance, and concluded it will exacerbate the imbalance, increasing the trade deficit to that area.

Here is just some of the insame horse-trading as regards Agriculture trade:

"For instance, while the White House and Johanns" claim CAFTA will boost trade between the U.S. and the deal's six Latin American nations, an August 2004 analysis by the U.S. International Trade Commission shows the U.S. trade deficit with the CAFTA countries actually growing from about $2.2 billion in 2003 to $2.4 billion when implemented.

The analysis also notes that the American Farm Bureau's estimate of $1.5 billion in increased ag exports to CAFTA countries is nearly five-times greater than ITC's more truthful forecast: just $328 million.

But even that modest news is less so because while "exports of corn and rice... are likely to increase substantially," estimates the ITC, the overall impact will be "negligible on total U.S. production and employment.

Indeed, according to the ITC, "After full phase-in of tariff elimination," - a 15- to 20-year period for many ag products - U.S. exports to CAFTA countries "as a whole would increase by $2.7 billion" while U.S. imports"as a whole would increase by $2.8 billion."

And also consider that the U.S. manufacturing sector is also damaged heavily.

After reviewing these two analyses, it is manifest your summary of CAFTA is simplistic and misleading. It suggests you have not really read any good summaries of the bill, let alone the actual document, and hence you..and many other proponenet of it... don't really comprehend what CAFTA is doing. You want prosperity? Then don't vote for CAFTA...our own ITC concludes it is harmful...and will only get worse as the phaseouts end.

[Paul Ross]

Okay, let's just pop your silly balloon with just one of your house-of-cards assumptions, where you try to overstate U.S. savings and challenge the orthodox numbers:

s for consumption, long-lived assets such as autos and furniture are treated as if they were disposable pens.

This analysis ignores the reality of depreciation. If you tried to sell your car right after rolling off the lot, or your furniture, even brand new, it is going to be steeply depreciated in fact. Most people who buy cars on finance are "underwater" on their loans right up until the last year of the loan. Hence, no equity until that last year! No equity, no 'savings.' And by then, it is usually substantially older, and requires major maintenance. New tires, belts, hoses, and perhaps gaskets and valve train work.

So your "cure" would actually be "error" plain and simple.

[Paul Ross]

You think I am Eeyore? LOL! BTW, You will never hear Eeyore laugh. So who do you think you are? Tigger? The Rabbit? Certainly not the owl, particularly when you spout the following errant nonsense:

you must have missed the fact that...inflation is low

Oh, really, why do you think Greenspan has the pedal to the metal now trying to up interest rates without forcing an immediate recession?

Could it be because there is a LOT of inflation that is not "officially" reported, h'mmm? Housing rents inflation understated and CPI Understated, Gillespie Research

Some history that Gillespie did on the economic indices of official Washington numbers would give even couldn't-care-less-about-anything Tigger pause before accepting the blarney you allude to uncritically:

"In 1996 -- the middle of the Clinton economic miracle -- the Kaiser Foundation conducted a survey of the American public that purported to show how out of touch the electorate was with economic reality. Most Americans thought inflation and unemployment were much higher, and economic growth was much weaker, than reported by the government. The Washington Post bemoaned the economic ignorance of the public. The same results would be found today.

Neither the Kaiser Foundation nor the Post understood that there was and still is good reason for the gap between common perceptions and government reporting: government data are biased in politically correct directions and increasingly have diverged from common experience and reality since the mid-1980s. Inflation and unemployment reports are understated, while employment and other economic data are overstated, deliberately.

For several years, I conducted surveys among business economists as to how they viewed the quality of government economic data. The following were actual comments:

· The senior economist of a major retail company told me, "Quality varies. The retail sales numbers are terrible, but money supply data are great."

· The senior economist at a major bank offered, "There's a problem with money supply, but I think retail sales are pretty good."

The point is that when an economist knows a sector well, he also recognizes the limitations and distortions of related economic reporting. Gathering and reporting accurate information on a timely (one-month) basis for components of the U.S. economy is nearly impossible. Nonetheless, most career government statisticians in Washington work diligently to provide the best information possible within the limits of the existing reporting system. A number of reporting distortions, however, are not accidental.

What follows is brief background on the reporting system and how the numbers can be viewed. Separate installments will address the specifics of employment, inflation, GDP and budget deficit reporting. Other areas will be addressed upon request.

The first regular reporting of now-popular statistics such as gross national/domestic product (GNP/GDP), unemployment and the consumer price index (CPI) began in the decade following World War II. Modern political manipulation of the government's economic data began as soon as practicable thereafter, with revisions to methodology often incorporating positive reporting biases. As a result, investors and most economists, relying on the government's data, often miss underlying economic reality. Consider:

· During the Kennedy administration, unemployment was redefined with the concept of "discouraged workers" so as to reduce the popularly followed unemployment rate.

· If Lyndon Johnson didn't like the growth that was going to be reported in the GNP, he sent it back to the Commerce Department, and he kept doing so until Commerce got it right. The Johnson administration also was responsible for gimmicking the accounting that hides most of the federal deficit.

· Richard Nixon had a highly publicized war with the Bureau of Labor Statistics on the unemployment data. Nixon wanted to report the unemployment rate as the lower of the seasonally adjusted or unadjusted number, at any given time, but not specify same to the public. While that approach was unconscionable at the time and never used, basically the same methodology was introduced in 2004 as "state-of-the-art" by the current Bush administration.

· The Carter administration was caught deliberately understating inflation.

· Systemic changes were introduced during the Reagan administration to boost reported GNP/GDP growth on a regular basis. The wildest manipulations, however, happened at the time of the 1987 liquidity panic. In addition to intervention in the futures markets by the New York Fed to help prop the stock market after the October 19th crash, direct and heavy manipulation of the trade deficit data, under the direction of the Federal Reserve and U.S. Treasury, was used in conjunction with massive currency intervention to help bottom the dollar and to contain the currency panic at year-end 1987.

· The first Bush Administration began efforts at the systematic reduction of the reported rate of CPI inflation, and worked an outside-the-system GDP manipulation aimed at helping with the failed 1992 reelection bid.

· As former Labor Secretary Bob Reich explained in his memoirs, the Clinton administration had found in its public polling that if the government inflated economic reporting, enough people would believe it to swing a close election. Accordingly, whatever integrity had survived in the economic reporting system disappeared during the Clinton years. Unemployment was redefined to eliminate five million discouraged workers and to lower the unemployment rate; methodologies were changed to reduce poverty reporting, to reduce reported CPI inflation, to inflate reported GDP growth, among others.

· The current Bush administration has expanded upon the Clinton era initiatives, particularly in setting the stage for the adoption of a new and lower-inflation CPI and in further redefining the GDP and the concept of seasonal adjustment.

As a result of the systemic manipulations, if the GDP methodology of 1980 were applied to today's data, the second quarter's annualized inflation-adjusted GDP growth of 3.0% would be roughly three percent lower (effectively netting to zero percent or below). In like manner, current annual CPI inflation is understated by about 2.7% against the pre-Clinton CPI methodology (would be about 5.7%), and the unemployment rate is understated by about seven percent against its original design and what many people would consider to be actual unemployment (would be about 12.5%).

As to the financial results of federal operations, the application of accrual accounting and generally accepted accounting principles to federal operations shows an actual fiscal year 2003 deficit of $3.7 trillion, as reported by the U.S. Treasury, versus the reported cash-basis $374 billion.

[Toddsterpatriot]

In like manner, current annual CPI inflation is understated by about 2.7% against the pre-Clinton CPI methodology (would be about 5.7%)

I like this tidbit. So, if CPI were really 5.7%, why are 10 year T-Bonds yielding 4.28%? Maybe the current rate of 3.0% is more accurate than the pre-Clinton measurement.

[Paul Ross]

Maybe the current rate of 3.0% is more accurate than the pre-Clinton measurement.

More likely it isn't.

Maybe the rates are simply responding to the market...which is highly distorted, due to China dumping its excess U.S. dollars accumulated into those T-Bills. Current PRC stash of Treasuries accumulated, $660 billion, and rising...

[Paul Ross]

We need to widely disseminating this factoid:

CAFTA Built on Rotten Foundation of Kangaroo Courts
Sierra Times... ^ | July 14, 2005

U.S. Rep. Charlie Norwood (R-GA) today called on fellow House Members to closely examine the system of settling all trade and immigration disputes under CAFTA, as a violation of American legal principles and a kangaroo court system stacked against the United States. In the event that Central American governments' understanding of CAFTA immigration provisions are different than what the Bush Administration is now telling Congress, it would be an international tribunal set up under CAFTA and staffed by a panel of three "judges" that would settle the dispute. CAFTA rules under Article 20.9 dictate that the tribunal consists of two Central Americans pitted against a single U.S. judge in all cases involving the United States.

CAFTA’s international tribunal would use international, not U.S. law, to judge whether existing federal, state or local U.S. policies had to be changed to conform with CAFTA’s 1000 pages of non-trade policy requirements. Failure to meet the CAFTA tribunal dictates would subject the U.S. to indefinite trade sanctions until the offending U.S. laws were overturned, under CAFTA Article 20.16.

Under the CAFTA international tribunal and law system, American citizens lose their due process right of appeal to the U.S. justice system, virtually eliminating American legal sovereignty over issues covered by the agreement.

Other CAFTA provisions seem designed to actually trigger later challenges before CAFTA tribunals. For instance, CAFTA creates a new “right” for services to be provided by "a national of a party in the Territory of another party" (CAFTA Article 11.14(c)) yet is silent on what visas would be used to allow such temporary entry - begging a challenge of any future U.S. denial of entry to workers from the CAFTA countries.

Norwood says the packed tribunals are the defining feature of CAFTA, loaded with conflicting language, the meaning of which CAFTA tribunals alone would be empowered to decide. "In some places, certain CAFTA provisions appear to safeguard American interests, but then a few paragraphs later a clause is included that directly conflicts and overturns what seem like safeguards,” says Norwood. "And then these kangaroo courts stacked against America determine which interpretation prevails, with no right of appeal. With this system of dispute resolution as the foundation of CAFTA, no amount of protections will ever be adequate to prevent Americans from being run over by unfair trade policies and open borders immigration."

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

"CAFTA’s international tribunal would use international, not U.S. law, to judge whether existing federal, state or local U.S. policies had to be changed to conform with CAFTA’s 1000 pages of non-trade policy requirements. Failure to meet the CAFTA tribunal dictates would subject the U.S. to indefinite trade sanctions until the offending U.S. laws were overturned, under CAFTA Article 20.16."

[hedgetrimmer]

If CAFTA reaffirms our obligations to the WTO, it surely means that massive illegal immigration from all over the globe is about to come our way.

WTO agrees to push Dhaka's motion for movement of natural persons

[hedgetrimmer]

It looks like the Treasury deparment is getting ready for the CAFTA to pass. They are trying to meet their obligations for lowering the cost of remittances to Guatemala, a CAFTA country. How much money do you think is going to go out as remittances, once the CAFTA passes?

To me, this is a clear indication that we are about to get hammered with illegal immigration from the CAFTA countries, because we all know that remittances from illegal immigrants is just one of the the WTO's way to redistribute our wealth to the LDCs.

***

U.S. and Guatemala Launch Summit of the Americas Remittance Partnership

The U.S. Treasury Department and the Guatemalan government today announced the launch of a remittance partnership to facilitate the reduction of the cost of sending remittances and create an environment where their potential contribution to economic and financial-sector development is maximized.

"Our bilateral work will be focused on concrete actions designed to foster the realization of this commitment and will help create a template for future bilateral remittance work in the region," said U.S. Treasury Secretary John W. Snow. "This initiative will focus on fostering competition, efficiency and accessibility in the remittance market. Financial literacy programs, payment system modernization, and appropriate modifications to the regulatory environment are expected to be important elements of the work. We will aim to modernize the Guatemalan payment system while laying the groundwork for eventual harmonization with the U.S. system. Our governments will address relevant policy issues and seek to eliminate unnecessary regulatory obstacles to competition in the remittance market."

Guatemalan Vice-President Eduardo Stein and U.S. Ambassador John R. Hamilton will hold a press conference in Guatemala today to launch this initiative.

Guatemala has been selected as the first pilot country in this broad regional initiative. The Administration joined Western Hemisphere counterparts in committing to this goal at the Special Summit of the Americas in January of 2004 as an avenue to foster growth throughout the Hemisphere. The specific goal of the Summit of the Americas is to take concrete actions to create the conditions to bring down the cost of sending remittances by 50 percent by 2008.


-30-


http://www.ustreas.gov/press/releases/js2614.htm

[Toddsterpatriot]

Maybe the rates are simply responding to the market...which is highly distorted, due to China dumping its excess U.S. dollars accumulated into those T-Bills. Current PRC stash of Treasuries accumulated, $660 billion, and rising...(Don't suppose you have a source for this number?)

Obviously. The people holding the other $4 trillion of our public debt will gladly earn less than the true rate of inflation just because China bought $112 billion between September 2000 and September 2004. Right.

The Chinese have become the second largest holders, with $174 billion worth, a sharp increase from $62 billion in Sept. 2000. (Wednesday, December 1, 2004)

Bruce Bartlett

[Toddsterpatriot]

Mase: If I wanted to take the time and look I could find numerous threads where you have strongly defended price supports (welfare) for sugar beet and cane farmers.

hedgetrimmer: You didn't and you can't.

hedgetrimmer: To summarize, a price support program that literally pays for itself keeps American sugar producers in business, gives us a self-sufficient sugar supply( a goal other countries feel is important too) and stabilizes the price so that manufacturers that produce with sugar don't have their prices going through the roof all the time for raw materials.

hedgetrimmer: I'm actually defending stable prices and secure supples.

You're funny. You don't defend price supports? But you defend them because they give us stable prices (at 2 to 3 times the world price, I know, a minor detail) and a secure supply? But you don't defend them? LOL!!

Tell the truth, is this Bill Clinton? Or are you Hillary? Or would your screen name be bushtrimmer? Carpetmuncher? ROFL!!

[Iron Matron]

Easy, there, Iron Matron. GWB has signed CAFTA, and this is a pro-Bush site.<<<

Thanks designer. I voted for Bush four times (Governor of my State and President), I was about as pro-Bush as anyone could get..lost friends over support of Republican Party.

Then I start looking into this stuff and my blood started boiling..no matter who the President is..he should be for the Citizens of the United States of America and no other.

Clinton had (and has) Democrats falling all over themselves panting, no matter what a moron he turned out to be..should Republicans defend what Bush is doing, no matter what?

If I support this President, it is because he has an understanding and respect for the Constitution, not because he seems willing to sell us out.

I will be pro-Bush once again when this CAFAT nonsense is ended and our Sovereignty is secure..

[Mase]

Okay, let's just pop your silly balloon with just one of your house-of-cards assumptions, where you try to overstate U.S. savings and challenge the orthodox numbers

Orthodox numbers? For someone who claims to know so much, how could you miss something so obvious?

In the first place, the personal savings rate is irrelevant. The way the government measures this is flawed because it tracks what is left of Americans' disposable income each month rather than calculating what people put in bank accounts, brokerages and other places. Look at the flows every month into mutual funds and other investments. It has to be coming from somewhere.

Instead of measuring that activity, the Commerce Department computes the personal savings rate (which is intended to only track current savings and not previously invested assets) by calculating monthly after-tax income from many sources, mainly wages, dividends, interest, rents and employer contributions to pensions, and then subtracting expenditures.

This method understates income and overstate expenses mostly because it does not count capital gains from the sale of stocks or homes as part of disposable income, but it does count capital gains taxes as expenditures. It also counts the purchase of a car, in a lump sum rather than dividing it up into payments as most people do.

Just because Americans spend prolifically doesn't mean they don't save. The U.S. Treasury data shows that Americans have earned $3.5 trillion in capital gains since 1997. This is more than the combined gains of the preceding 20 years. Household net worth is almost $49 trillion dollars which is twice what it was just a decade ago. Before you jerk your knee, please be aware that only about 20% of this wealth comes from homeowner equity. How much wealth do we have to create Paul, until you think it's OK to spend some?

Median family net worth is more than $100,000 which is up 52% in constant dollars from 1995, when it was $66,000.

With regular savings, Americans save about 5% of disposable income which has not varied much over the past 15 years.

Bloviate all you want about depreciation, orthodox numbers, houses made of cards and the imminent depression. The fact is, American's are richer now than at any other time in history.

[hedgetrimmer]

Obviously you are bent on implementing sustainable development throughout the CAFTA countries and its subsequent destruction of private property rights, through the CAFTA. You have categorically avoided discussion of the implications of the various anti-sovereignty obligations that CAFTA imposes.

[Toddsterpatriot]

Obviously you are bent on implementing sustainable development throughout the CAFTA countries and its subsequent destruction of private property rights, through the CAFTA.

Nope. You're the only bent one. You are Bill Clinton. LOL!

[hedgetrimmer]

You have been asked about the sustainable development clause in the CAFTA before. How can you support an international agreement that implements sustainable development? You pretend to be conservative, but you favor a Leninist global trading system that imposes restrictions on human freedom that were the brainchild of the global socialist Gro Harlem Bruntlandt. You're a fake.

[hedgetrimmer]

Farmers defending themselves from your highly regarded sustainable development policies of the WTO and your friends the Chinese communists.

Party bows to people power as villagers resist state land-grab

THE Chinese Government has abandoned plans to take over farms to build a power station after lengthy public resistance and a protest in which six people were killed.

Officials of Baoding city in Hebei province near Beijing had violated regulations covering compensation for land requisition from the villagers of Shengyou, the Xinhua news agency reported yesterday.

Six farmers from Shengyou were killed and 48 wounded on June 11 after hired thugs wielding pipes and shovels charged the men and their families as they squatted in makeshift shelters to guard their land. The farmers defended themselves with clods of earth. They stood little chance when shots rang out.

Aware that land rights are an emotive issue for more than 700 million farmers across the country, China’s leaders were swift to order that those responsible be brought to justice. So far 31 people have been formally arrested and another 131 placed in criminal detention.