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U.S. Needs Better Trade Policy, Better Politicians

By       Message Craig Harrington       (Page 1 of 1 pages)     Permalink    (# of views)   No comments

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The fact that the United States' economy is in the process of a rapid collapse is news to no one.  However, there are simple ways to address and correct the problem before it is too late.  The United States needs to start exporting again; specifically, the U.S. needs to balance the amount of material that it imports with an equal amount of exports.     

Our trade imbalance has been growing at a staggering pace for the past several years and is now on the verge of exploding out of our control.  From 2002 to 2007 the United States' trade deficit--the dollar value of its imports minus exports--grew from over $470 billion annually to nearly $791 billion annually.  This upward trend will continue into the future as well, early projections for 2008 place the deficit at well over $800 billion.  Including estimates for 2008, the United States' economy has lost over $4.8 trillion via our net trade deficit in just the last seven years.

Every home, building, consumption good, income, savings and tract of land has a value, and the sum of those items would be the value of the "entire"- economy.  The full "dollar value"- of the economy is impossible to pinpoint, but for the sake of argument we could value it at $50 trillion.  If our current rate of loss --approximately $800 billion annually--continues unchanged, the value of our economy will be completely sapped in 60 years.  Unfortunately, our current rate is not expected to remain unchanged for the next 60 years; as U.S. companies offshore more labor and production, and companies and consumers are forced to buy more from overseas, our rate of loss (i.e. the trade deficit) will increase exponentially. Thus, the economy could be sapped in half that time, or less.

A very small portion of the lost money has been reinvested in the United States, but much of that investment is a "catch-22."-  Foreign capital enters the U.S. which gives businesses the necessary liquidity to maintain operation, but it is given in exchange for controlling shares of the company.  Billions of dollars of investment are not very useful to an entrepreneur in the long-term if the money comes with the condition that the investor buy out and takeover the business.

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There are only two things that can stop the rapid draining of our economy by the rationally self-interested realists out there who understand that competition is about winning, not just perpetuating that game: 1) Americans could unilaterally agree to invest what little money they still have into U.S. companies, industries and goods or 2) the government could step in and make it happen for us.  Since consensus building tends to be difficult in general--and would be practically impossible among 306 million citizens--the only reasonable option is government intervention.

We need leaders who have expert knowledge, who can give reasonable advice, and who understand the complexities of the issues they face.  For some reason the voters of this once great nation have come to the irrational conclusion that one must be a lawyer in order to be in government.  Not an engineer or a medical doctor, not a Ph.D. or teacher or business manager. There is no law stating all politicians must be lawyers.  An overwhelming majority of all members of Congress (House and Senate), and a similar percentage of all U.S. Presidents, have a legal education.  A very large percentage of the remaining non-attorneys are military men. 

If you were in need of surgery you would not ask a lance corporal or corporate attorney to give you medical advice.  If you wanted to build a bridge you wouldn't call upon a general or judge to draw up the blue prints.  Specific to our current economic crisis, if you were trying to fashion a "from scratch"- economic scheme to invigorate dying industries, spur technological growth and create jobs you certainly wouldn't ask the editor of the Harvard Law Review or an insubordinate fighter pilot to craft your plan.

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The United States needs better options.  Our foray into "free trade"- has continued unabated for decades and it is destroying this country.  We need people who will look at the trade deficit and see that the $256 billion we lost to China in 2007 (our largest trade debt) will never be offset by the $15 billion we gained from the Netherlands (our largest trade surplus) during the same time period.

Unfortunately, our leaders--most of whom are unqualified for the position they hold--do not see this simple fact.  The House of Representatives and Senate have repeatedly voted against bills and amendments to existing laws which would be helpful to our condition.  Meanwhile, they pass laws and ratify trade deals that propel us toward our path of destruction. 

On June 8, 2005, the House voted 86-338 to reject a bill that would withdraw the United States from its ruinous pact with the WTO.  On June 20, 2005 the House voted against a bill which would have punished companies that offshore jobs to "tax havens"- overseas.  On March 16, 2006 the Senate voted 44-55 against a bill that would have brought on an investigative study of current foreign holders of U.S. Treasury bonds.  On September 19, 2006 the Senate voted 61-37 rejecting a legal amendment that would mandate the scanning of 100 percent of all shipping containers into the United States (see: freetrade.org).

Our representatives vote against things--like withdrawing from the WTO--which are publicly favorable and necessary for our well-being, and they reject things like container scanning and investigations of foreign debt holders which protects our national defense and security.  Either they are easily manipulated by an elite few to vote against our best interests, or they simply don't understand what they are doing.  We need leaders who encourage replacing imports with domestic production, and leaders who are willing to face the music and withstand the pressure of international interests.  There are no such leaders in the government right now.  It is up to the voters to hold elected officials to their word and find ways to remove them from office when they do not act in the nation's best interest.

 

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Craig Harrington is pursuing a degree in History and Political Science at The Ohio State University. He is also a journalist for EconomyInCrisis.org.

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