Posted on 03/13/2006 7:09:56 AM PST by Willie Green
For education and discussion only. Not for commercial use.
I am surprised at the recent outrage regarding the sale of American port operations to a United Arab Emirates' company, President Bush's proposal allowing foreign ownership of domestic airlines, etc.
After all, we have enjoyed more than 25 years of continuous and growing trade deficits. And why not, if foreigners are willing to ship us more goods than we ship them, good for us as it enables us to consume more than we as a nation produce.
Unfortunately, there is just one problem, the only reason foreigners would continue shipping us more goods than we ship them is if we do one of two things; sell them something of value that we produced in the past (i.e. American assets), or sell them something of value that we will produce in the future (i.e. American debt). As the excess currency sent overseas from the trade deficit is repatriated to the United States in the form of asset and/or debt acquisitions. All we Americans have to do to get more than we produce now is sell our past and mortgage our future.
Foreign acquisition of American assets over the past 24 years exceeded American acquisition of foreign-based assets by $2.5 trillion. Additionally, during this period, foreigners have purchased more than $1.5 trillion of American public debt and currently purchase 50 percent to 60 percent of all treasury offerings. To put this into perspective, those two numbers are approximately $8,000 and $5,000 respectively for every American man, woman and child and our $700 billion trade deficit increases them at the combined rate of $2,100 per year.
Obviously, selling assets and increasing loans to fund current consumption is a wealth-depleting process. So it's OK to continue buying foreign goods, but don't be outraged or surprised as foreigners purchase more American assets and debt with your dollars.
"I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."-- President Andrew Jackson - (1824)
Yeah, but the crack whore free traders tell us if we don't keep it up the whole economy is going to crumble. Kind of like a drug dealer telling a client that if he kicks the habit he will feel bad.
I thought Japan bought all of America in the 1980s. Jeez its hard to keep up with who owns us now.
Hey, its true. Withouht cheap goods produced by workers living their Third World lifestyles, we'd be screwed. Which is what makes us THE GREATEST COUNTRY ON EARTH!
The one and only time in the history of the US that the government owed positively nothing to anyone was under the leadership of Andy Jackson.
"Old Hickory" bump.
Oh wait a minute, your heroes, the unions, have never ran a business, just sponge off and ruin them.
The Federal government is the largest landowner in America.
Why not sell off Federal land to pay off debt?
As a side note, we could restrict purchasers to American citizens and corporations but permit long term (99 year) leases to foreign inestors.
Let's just say anything we want to, the truth is irrelevant if it does not comport with our bigotry.
Again for the ill informed we were not selling port operations. The port assets in question, terminal and other assets were being and would continue to be leases.
I can't see any difference fiscally who assumes the leases.
But hey go wild guys spout off as to how it is Bush's fault and we dodged a big bullet by not selling our assets.
It's hopeless. Truth is irrelevent.
A couple ideas worthy of consideration.
"I am surprised at the recent outrage regarding the sale of American port operations to a United Arab Emirates' company."
The port deal is a bad premise for the sentiment expressed in the remainder of the article. The ports were already operated by a foreign company to begin with. From an economic perspective at least, whether that company was British or UAE doesn't really matter.
Don Corleone was a very successful businessman, Dane.
I would've thought that you, of all people, would be in favor of imported olive oyl.
Whatever willie, if you hold up don corleone as another Andrew Jackson, that's your perogative.
This is the guy that explains our economy in "crack whore" terms.
The one who will try to tell you economics by explaining how our President is hiding all our sorrows behind false signs of a healthy economy during a time when our country is engaged in a war.
Welcome to "Flim Flam Economics".
Didn't this happen before, in the 1980's, when the Japanese banks (owned by the governments) bought lots of US assets like highrise office buildings, etc? And then they had their own financial crises, and Americans bought them back for pennies on the dollar?
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