Once again we are being offered
More economic happy talk regarding a situation there is no cure for.
Editorial: Curing the Debt Addiction Published: October 2, 2006
The Treasury secretary, Henry Paulson Jr., capped off his recent trip to China with a visit last week to Capitol Hill. His aim was to dissuade Senator Charles Schumer, Democrat of New York, and Senator Lindsey Graham, Republican of South Carolina, from moving forward on their bill to impose punitive tariffs on China. The two senators accuse China of manipulating its currency, the yuan, to gain an unfair trade advantage.
Mr. Paulson was right to try to parry the senators' protectionist efforts, and he has succeeded, for now. But the issue will persist so long as he fails to satisfactorily address a root cause of mounting protectionist pressures: the United States' growing indebtedness to the rest of the world.
How do we stop buying what we need but no longer make for ourselves? Are we supposed to run around naked because we no longer make our own clothes? Go barefoot because we no longer make shoes? Perhaps we should all gaze at our navels because there isn't one domestic TV manufacturer left...
Face it good citizen, the trade deficit exists because of the shortsighted policies of this nation's commercial sector. The relentless pursuit of profits led the charge to dismantle trade barriers so they could exploit cheap foreign labor.
Old factories closed here so new ones could spring up there. The end result? Tens of millions of workers had to find new jobs while the old factories were torn down or gutted and left to rot.
Instead, Mr. Paulson recently told reporters that the nation's deficit in trade and other international transactions -- on track this year to reach $800 billion, or nearly 7 percent of the economy -- is actually a sign of strength. America has kept the world prosperous, he said, by buying global goods.
What kind of Orwellian newspeak is this? Debt = good? How happy can anyone be to learn we're (single-handedly) supporting the global economy ON BORROWED MONEY?
How are we covering this bet? Asset inflation, hellacious asset inflation...to the point where most of us couldn't afford the buy the homes we live in today.
To reduce excessive foreign borrowing, it is imperative to reduce the federal deficit. To that end, Mr. Paulson has pledged to help the Bush administration find ways to curb Social Security, Medicare and Medicaid. That would certainly cut the budget, but at the cost of weakening the already frayed safety net -- at precisely the time when increasing globalization is creating economic hardship for many Americans. It would be far better to start a deficit reduction effort by calling for a moratorium on further tax cuts and allowing other Bush-era tax cuts to expire as scheduled.
So, as the Secretary of the Treasury sees it, we need to reduce the federal deficit in order to curtail `excessive' foreign borrowing.
Is he really that stupid or does he merely think the rest of us are?
So long as we no longer make necessary items for ourselves we will continue to be obliged to import them...regardless of the federal deficit.
That's the bottom line good citizen. The trade deficit will continue to grow until we start producing what we import for ourselves.
It took commerce thirty years to put us behind this eight-ball but now that we're here, we're stuck. So long as those who control the value of money keep the dollar artificially high compared to other currencies there is zero incentive to re-establish operations here.
Flipping that rock over, once our currency does slides into the cellar there will still be zero incentive to invest, mostly because we're already so far in the hole that there will be zero to invest.
The very reason we have a trade deficit is because the items we used to export are now made in the nations that used to buy them from us...while we no longer make those items ourselves!
The very reason we have a trade deficit is because the items we used to export are now made in the nations that used to buy them from us...while we no longer make those items ourselves!
The very reason we have a trade deficit is because the items we used to export are now made in the nations that used to buy them from us...while we no longer make those items ourselves!
Sorry but you really need to understand this...
The very reason we have a trade deficit is because the items we used to export are now made in the nations that used to buy them from us...while we no longer make those items ourselves!
The federal budget deficit is an entirely separate issue. The now huge budget deficit is largely due to federal funds being used (pumped directly into the economy) to provide cover for the raping of this nation's industrial/technological base.
How else could the economy continue to grow when it was actually shrinking?
9 trillion dollars worth of `funny money'...
So a few could be rich.
Crime of the century doesn't even begin to cover it. The massive fraud that has been perpetrated upon the people of this nation is monumental in proportion, there's never been anything like it!
That said, who we elect to public office isn't nearly as important as who we entrust with the welfare of our society, those who manage the engines of commerce from which the common good is served.
Once again I ask you all to reconsider the wisdom of allowing anyone to put their own interests ahead of the interests of society.
Thanks for letting me inside your head,
Gegner