Friday, February 10, 2006

Trade Deficit Nearly A Trillion Dollars, Deficits With Nearly All Countries!


By Elaine Meinel Supkis

Nearly a trillion in red ink. Our real budget deficit is half a trillion (excluding Social Security funds). Our savings rate is negative. These numbers matter, a lot. Like Gulliver, tied down by a trillion loans, we are pinned to the ground and will never rise again. I can't see any way of turning this around, safely.

Business Week:
The U.S. trade deficit soared to an all-time high of $725.8 billion in 2005, pushed upward by record imports of oil, food, cars and other consumer goods. The deficit with China hit an all-time high as did America's deficits with Japan, Europe, OPEC, Canada, Mexico and South and Central America.

The Commerce Department reported Friday that the gap between what America sells abroad and what it imports rose to $725.8 billion last year, up by 17.5 percent from the previous record of $617.6 billion set in 2004.

It marked the fourth consecutive year that America's trade deficit has set a record and was certain to spark increased debate in Congress over President Bush's trade policies. Since mid-2000 the country has lost nearly 3 million manufacturing jobs and Democrats blame the administration's policy of emphasizing free trade agreements.
We run this deficit with nearly farking everyone! This is a currency problem from hell. The last 15 years, repeatedly, our government has sold 30 year bonds at a rate that is the same as a 1 year bond which is ridiculous. Go to the bank and ask them to give you a loan for 20 years that is the same rate as a 1 year loan! They will kick you unceremoniously out the door.

The reason why we can do this impossible thing, repeatedly, is because our "buyers" who happen to be nations running trade deficits with us, want us flush so we keep the trade deficits growing and voila! Each year, they grow and grow. LIke Jack's little beansprout grows to the clouds and up there is this angry giant, right?

No sane nation allows itself to get this out of whack. Note how, in my graph, the last surplus we ran was when the Hubbert's Oil Peak occured here in America. Since then, we import more and more oil. This is very bad on every level. On top of this, to mask the inflation caused by importing increasing amounts of oil, we have to export our industry to cheaper lands. This way, there is no inflation.

This is now a ruthless process. All industry must vacate America as swiftly as possible because anyone who doesn't will lose in the American marketplace where the cheapest goods triumph.

The near collapse in our pension system is just one sign of our declining status. We will be third world people in due time, this is the only "solution" to all these plunging numbers. To make things cheaper, we have to become cheaper. Cheep cheep, everyone!

My daughter has experienced this first hand. Greyhound buses have become worse and worse as the management struggles with high fuel costs. Her last trip, for she won't commute on them after this, the bus caught on fire, the driver limped along with fire engines and cops surrounding it, they had to wait in the freezing cold on a thruway for a new bus, it was the final straw after many bad bus experiences due to cheap drivers who didn't know anything to failing equipment. Sort of like NASA is turning into a mess.

Anyway, this is our future. Third world buses that wheeze along, barely, overloaded with passengers, beggar children running around, pleading for food and dead bodies on sidewalks.

God Bless America.
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