October 11, 2008 at 18:09:44

The Trade Balance and the Limits of the Paulson Rescue Plan

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By Dan Lieberman (about the author) Page 2 of 2 page(s)

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Lower the trade deficit by limiting consumption of superfluous imported goods, diminishing energy needs, withdrawing from foreign adventures and decreasing foreign assistance.

Cut the budget for defense spending, earmarks, pork barrel, and non-expedient services, which will lower the deficit, strengthen the dollar and provide funds that more directly attack the financial problems.

Direct tax policies so those with definite needs will receive government benefits and those who have only superfluous needs will supply the funds, Redistribute wealth and soften the calamity on the lower and middle classes.

Plug tax loopholes that will also lower the national deficit and gain resulting benefits.

Revive domestic manufacture of essential industries – steel, metal products, commodities, and autos – which will increase payrolls and make the domestic economy less dependent on credit.

The United States has superior technology, highly productive agriculture, abundant natural resources, escalated productivity, developed transportation, efficient distribution, massive infrastructure, educated population and a blessed variable climate; reasons to be optimistic that an economic powerhouse can find an acceptable solution to a major economic crisis. One reason to be pessimistic is due to the free market purists and flag waving "patriots" who will fight the distressing situation with slogans and empty words. Their deceptive concepts might prevail to the ultimate bust.

Another impediment to solution is the mindset of the American people. The U.S. consumer has become like The Great Gatsby believing in "the green light, the orgiastic future that year by year recedes before us." The Paulson plan, although an important stop gap, is only a "boat against the current, borne back ceaselessly into the past." Negative trade balance leading to using credit to finance domestic production is the major problem. Is it difficult to convince a mindset to place the reverence of survival before the desire for imported IPods?

Dan Lieberman is the editor of Alternative Insight, a monthly web based newsletter. Dan has written many articles on national issues, which have circulated on websites and media throughout the world. He can be reached at alternativeinsight@earthlink.net

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Dan Lieberman is Editor of Alternative Insight, a monthly web based commentary news letter. His articles on politics and foreign affairs have appeared on many web sites.

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