Posted on 09/29/2006 7:19:33 AM PDT by Theodore R.
How to bring manufacturing back home
-------------------------------------------------------------------------------- Posted: September 29, 2006 1:00 a.m. Eastern
In July, our trade deficit hit yet another all-time record, $68 billion, an annual rate of $816 billion. Imports surged to $188 billion for the month, as our dependency on foreigners for the vital necessities of our national life ever deepens.
China's trade surplus with us was $19.6 billion for July alone, moving toward an all-time record of $235 billion for 2006 – the largest trade deficit one country has ever run with another. Our deficit with Mexico is running at an annual rate of $60 billion. With Canada, it is $70 billion. So much for NAFTA. With the European Union, it is running at $160 billion.
America as the most self-sufficient republic in history is history. For decades, U.S. factories have been closing. Three million manufacturing jobs have disappeared since Bush arrived. Ford and GM are fighting for their lives.
(Column continues below)
Bushites boast of all the new jobs created, but Business Week tells the inconvenient truth: "Since 2001, 1.7 million new jobs have been created in the health care sector. ... Meanwhile, the number of private sector jobs outside of health care is no higher than it was five years ago."
"Perhaps most surprising," writes BW, "information technology, the great electronic promise of the 1990s, has turned into one of the biggest job-growth disappointments of all time. ... (B)usinesses at the core of the information economy – software, semiconductors, telecom and the whole gamut of Web companies – have lost more than 1.1 million jobs in the past five years. Those business employ fewer Americans than they did in 1998, when the Internet economy kicked into high gear."
Where did the high-tech go? China. Beijing's No. 1 export to the United States in 2005, $50 billion worth, was computers and electronics.
If Americans are the most efficient workers on earth and work longer hours than almost any other advanced nation, why are we getting our clocks cleaned? Answer: While American workers are world-class, our elites are mentally challenged. So rhapsodic are they about the Global Economy they have forgotten their own country. Europeans, Japanese, Canadians and Chinese sell us so much more than they buy from us because they have rigged the rules of world trade.
While the United States has a corporate income tax, our trade rivals use a value-added tax. At each level of production, a tax is imposed on the value added to the product. Under the rules of global trade, nations may rebate VAT levies on exports, and impose the equivalent of a VAT on imports.
Assume a VAT that adds up to 15 percent of the cost of a new car in Japan. If Toyota ships 1 million cars to the United States valued at $20,000 each, $20 billion worth of Toyotas, they can claim a rebate of the VAT of $3,000 on each car, or $3 billion – a powerful incentive to export. But each U.S. car arriving at the Yokohama docks will have 15 percent added to its sticker price to make up for Japan's VAT.
This amounts to a foreign subsidy on exports to the United States and a foreign tax on imports from America. Uncle Sam gets hit coming and going. It is as though, after firing a round of 66 in the Masters, Tiger Woods has five strokes added to his score for a 71, and five strokes are subtracted from the scores of his rivals. Even Tiger would bring home few trophies with those kind of ground rules.
The total tax disadvantage to U.S. producers – of VAT rebates and VAT equivalents imposed on U.S. products – is estimated at $294 billion.
Exported U.S services face the same double whammy. A VAT equivalent is imposed on them, while the exported services of foreign providers get the VAT rebate. Disadvantage to U.S. services: $85 billion annually.
Why do our politicians not level the playing field for U.S. companies?
First, ignorance of how world trade works. Second, ideology. These robotic free-traders recoil from any suggestion that they aid U.S. producers against unfair foreign tactics as interfering with Adam Smith's "invisible hand," which they equate with the hand of the Almighty.
Third, they are hauling water for transnational companies that want to move production overseas and shed their U.S. workers.
How could we level the playing field? Simple. Impose an "equalizing fee" on imports equal to the rebates. Take the billions raised, and cut taxes on U.S. companies, especially in production. Create a level playing field for U.S. goods and services in foreign markets, and increase the competitiveness of U.S. companies in our own home market by reducing their tax load.
U.S. trade deficits would shrivel overnight. And jobs and factories lately sent abroad would start coming home.
Isn't it time we put America first – even ahead of China?
Build more robots, and develop more advanced ones.
There is a much easier way, go to the FAIR tax system. It would eliminate corporate income taxes, lower prices on our goods, and clean out the IRS rathole.
"Jew Hater"? That is a heckuva criticism. Why not stick to his ideas? There is nothing wrong with sweat shops here, it is better than welfare for those without the ability to do more mentally challenging work like you.
I think we could also maybe try destroying some machinery in our factories so we'd have to hire more people to hand-assemble stuff.
I would charge "Drivel"
We are at full employment, we are beyond full employment.
We don't need to bring any jobs home. We are subcontracting and there by leverging our capacity.
The economy is great life is good...... except for Rats and Brigadeers.
Assume a VAT that adds up to 15 percent of the cost of a new car in Japan. If Toyota ships 1 million cars to the United States valued at $20,000 each, $20 billion worth of Toyotas, they can claim a rebate of the VAT of $3,000 on each car, or $3 billion – a powerful incentive to export. But each U.S. car arriving at the Yokohama docks will have 15 percent added to its sticker price to make up for Japan's VAT.
He's not even using a contemporary, relevant example anymore. This looks like something he's cut and pasted from an article he would have written back in 1991. If Toyota benefits so much from this so-called "powerful incentive to export," then why the heck are they kicking the collective @sses of the Big Three auto manufacturers here in North America by manufacturing more and more of their products here in North America?
Yes, once again Buchanan is right and full of common sense. Just as he is right and full of common sense about immigration. Just as it is right and full of common sense about the Islamization of Europe.
But even as I type this the chorus of Furies will be belching their vituperation against Buchanan because he is "wrong" on the one issue that is determinative of all other issues, and according to this chorus, shall even be determinative of the fate of the nation.
He is right, in the sense that taxpayers in foreign countries are subsidising the goods we consume.
This means we need to work less, and they need to work more.
This is a problem?
I've been aware of the trade deficit for years and have always felt it was a BIG nail in America's coffin.It's been spun,downplayed,ignored and some people have even tried to justified it,but the fact remains it's America's wealth leaving our country and ending up in the bank account of other countries.The US government and multi-national corporations have been a big contributers to the situation but to pretend that the rest of us don't have a hand in it is bull.If this thing is ever going to be turned around it's going to take a whole new way of thinking and doing things by government, corporations and the guy on the street or it will just keep getting worse !!!
"Build crap, overcharge, coddle unions, bonusses for everybody!"
When that results in jobs moving offshore, protectionists have a ready solution.
"Make stuff cost more."
Thanks, but no thanks. And to think I almost voted for that idiot for president.
Heard the same BS when Reagan was President...
I voted for him in 92.... Big mistake...
pat buchanan is a moron
I miss the good old days!
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