Posted on 10/01/2006 3:30:13 AM PDT by NapkinUser
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.
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?
And if I were to guess, I would venture to suggest you probably got an F in Economics 101 as well as a D- in English comprehension?
READ THE FREAKIN ARTICLE again and try and absorb what the author is trying to convey as opposed to being "closed-minded" simply because of who he is.
If this was written by Clintoon, it would still resonate as long as the figures and facts are acurate--which IMHO, THEY ARE!!!!
Modern humans may have driven Neanderthals to extinction 30,000 years ago because Homo sapiens unlocked the secrets of free trade, say a group of US and Dutch economists. The theory could shed new light on the mysterious and sudden demise of the Neanderthals after over 260,000 years of healthy survival.
Anthropologists have considered a wide range of factors which may explain Neanderthal extinction, including biological, environmental and cultural causes. For example, one major study concluded that Neanderthals were less able to deal with plunging temperatures during the last glacial period.
Another possibility is that they were less able hunters as a result of poorer mental abilities, says Eric Delson, an anthropologist at Lehman College, City University of New York, US. But he adds that most theories are reliant on guesswork. Exactly how humans ousted Neanderthals remains a puzzle. “They were successful for such a long time,” he points out.
Jason Shogren, an economist at the University of Wyoming in Laramie, US, says part of the answer may lie in humans’ superior trading habits. Trading would have allowed the division of labour, freeing up skilled individuals, such as hunters, to focus on the tasks they are best at. Others, perhaps making tools or clothes or gathering food, would give the hunters resources in return for meat.
Largely unorganised
The idea that specialisation leads to greater success was first used in the 18th century to explain why some nations were wealthier than others. But this is the first time it has been applied to the Neanderthal extinction puzzle, says Shogren.
He cites archaeological evidence that suggests that humans, who joined Neanderthals in Europe about 40,000 years ago, specialised and traded both within and between regions. The evidence includes complex living quarters with different sections partitioned for different functions. Neanderthals, in contrast, lived in “largely unorganised” living spaces.
There is also evidence that the early humans, mainly one population called the Gravettians, imported materials. Ivory, stones, fossils, seashells and crafted tools were found dispersed through many regions. This greater pool of resources led to increased innovation, says Shogren.
Simulated circumstances
Shogren tested his theory with simulations of population growth. He even gave the Neanderthals, who were larger than Homo sapiens, a head start by assuming they were better hunters and individually brought home more meat - which may or may not be true.
But because humans were allowed to trade, in two of three similar simulations, they overcame this initial handicap and ousted the Neanderthals within 7000 years. In the third simulation, the two ended up co-existing.
“It’s an intriguing and novel idea,” says Delson. “But it requires stronger support.” He points out that the Gravettians in particular only emerged 28,000 years ago, while the last of the Neanderthals died about 29,000 years ago.
So the Gravettians could not have had very much influence in the extinction of the Neanderthals, he argues. “He also assumes that all they ate was meat, which of course is not true,” he adds.
The study will be published in an upcoming issue of the Journal of Economic Behaviour and Organization, co-authored by Erwin Bulte of Tilburg University in the Netherlands and Richard Horan at Michigan State University in East Lansing, US.
I'm looking at our GDP and low bond yields. I don't see how we're losing.
I think W's push for free trade is one of the few things he gets right in economics.
Carolyn
You forgot the Foreign investment graph back at your office... Add that to the equation, and if you can, find out who exactly is buying those bonds(foreign or domestic purchasers) a two bar graph should suffice... Then come back and present it to us.
For instance, I work with some manufacturers. Do you know that they have to account to the EPA for every fluorescent light bulb, ballast, and bottle of Wite Out (maybe obsolete by now, but you get the drift - any "toxic" chemical, no matter how much they use)/
Do you know how NAFTA works (the central letters FT standing for "Free Trade", amusingly enough)? If you product a product here in the US, and ship it to Mexico, it is untaxed under NAFTA. If you buy the product from China and ship it directly to Mexico, you have to pay taxes on it. If you buy it from China and perform a value add process on it (assemble it into something else or modify it) then there are no taxes on it. Got all that?
Of course, you have to account to the government for this once a quarter, and they'll fine you if you're wrong. They sometimes audit for this, so then you've got government bureaucrats in your already over-worked accounting office taking up your accountants' time with this crap.
Want to hear my rant about SOX audits (Sarbanes-Oxley)? No? Come on, it's a good one. Oh, alright, I'll hold off.
What I'm getting at of course is that it's regulations that are killing our manufacturing, not some silly tax policy that our competitors have. We're doing just fine at killing it ourselves, thank you very much.
screw free trade! how about just one time....fair trade!
free trade such as nafta/cafta/all first trade partners with the US have been nothing but shams....each time the agreements although good in design have worked adversely against the US!
And when the US protests at the most "impartial fair & balanced" body at the hague...it always loses to the eu or some 3rd world nation....
Free trade should be just that free trade...but it also must be fair trade!!!!
well that was a short list they provided you!
This is just a swipe at the Administration by a liberal whiner. I don't see any mention of Jimmuh Carter who single handedly set the US manufacturing economy into the biggest tailspin in US History.
SO, I CALL BS!
OK, I'll go to his defense.
Weapons themselves may not be imported, but quite a few electronic and sensor components already are. In many cases because they are simply not produced in this country.
DoD has no problem offshoring software development to India, even for weapons systems.
Even some of our military grade steel has to be imported because no-one here makes it anymore.
High-tech - buggy whip industry of today. We all will be managers and entrepreneurs.
I hope that was sarcasm.
It has been happening for decades.
Pat fails to realize that the post WW2 golden age of mfg in the US happened because our mfg infrastructure was untouched by the war and that infrastructure was destroyed elsewhere.
Manufacturing is not the only way to "add value". In fact, manufacturing, as a way to add value, has, is, and will continue to diminish.
"a nation that manufactures nothing IS nothing"
Well said. It would make a fine tagline, too.
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