Rebalancing The Economy

Toys, foodstuffs, pharmaceuticals, and other products manufactured, grown, or developed in China have been recalled as dangerous or toxic. Yet the trade deficit with China keeps growing without any offsets [with all of the material coming from the producers, we find a need to create an International Better Business Bureau with authority because the US Government won’t even try to make an attempt.]

An American toy “manufacturer” has outsourced his production to China and acts as a broker in the sale and distribution of toys while laying off industrial workers in the United States. Our county has become a bargain basement for foreign purchasers with dollars earned from American consumers. The American consumer is being taken big time, and even worse, he or she is funding the foreign purchases.

Isolation--Protectionism are just words. Pride and Prejudice [could be a good name for a book] are just words. Outsourcing—profit are more than just words. Trade Deficit—National Debt are more than just words. So, how do you avoid becoming an economic puppet to the global words that down you? So, how do you ingrain a nationalistic component into America’s economic doings? By a nationalistic component, I mean that we should be thinking of our own economy at the same time that the foreign investor drains our economy. Wake up and stop being sucked in as a result of oil imports and defective products. The need for alternate fuel sources is vital and mandatory to allow us to have our pride rather than to suffer global disdain.

It was probably 20 years ago that I suggested that in our State of New Jersey, we had trust funds from unemployment taxes and other such sources whose solvency for intended use, in theory, was to come from the income they generated. I recommended that instead of investing them in so-called safe or conservative assets, it would be reasonable to invest them into funding to be used by our Economic Development Agency to bring new business into the state or to enhance the viability of existing businesses to provide the funding necessary to generate income to the trust funds while, at the same time, building our state economy. Great idea since there would be controls over the business funding while providing economic growth. It was shot down very easily when the bottom line turned out to be that these so-called trust funds were invested in State debt securities and thus actually provided the difference between a balanced budget and one in deficit. They are not “Trust Funds” but were reserves to be used where the true monies were non-existent. We had invested our trust funds into New Jersey debt; we borrowed our own funds in creative accounting to delude you and me that we were being lied to about the true imbalance.

Every nation thinks only for itself except the United States (called nationality). Interesting, when we increased our sanctions against Iran—among our European allies there was little movement, with France, Italy and Germany holding back since they have multibillion trades with Iran.

American national pride, production, and employment must be the prime constant in growth:

Is it wrong=No. Is it right=No. Must it be recognized=Yes. Must it be used by us=Yes.

Our potential is important, but it is of no value unless we act on it. If not used, it becomes a wasted asset at our cost and expense allowing the creation of a deficit for use in buying industry and service industries.

Veterans returning from Afghanistan and Iraq find their jobs no longer exist; their businesses have become zero; their injuries prevent them from acceptability in the job market.

There are very few, if any, avenues for them to get funding either by way of business development funds or venture capital financing. The government owes them an obligation to access funding, which can be accomplished through SBA programming or other government funding. It can be exercised federally or possibly through supervised State agencies, such as the EDA in New Jersey, which are now operative in many States. The States are in position to help with business improvement methodology.

The plan would probably have to be phased in over a pre-determined period of time such as 5 or 10 years—but not longer. The government would have to deposit the trust funds without using the funds to pay either principal or interest on State-secured bonding, which would also have the effect of showing the viability of the funds. The Congress would have to develop sources of income and spending reduction. It can also put reins on the traffic tariff rule and eliminate the inequities.

It should be acknowledged that there is a global disrespect of the US and its economy. But, to their dismay, sharp changes in our GDP have a similar effect on them and their economies. No use laughing if you are next in line. Especially your industry and jobs are being outsourced, and your housing is being foreclosed.

Actually there is also an alternate approach. Through the years the debts owed by nations were forgiven bi-laterally through the IMF or other International agencies. We should seek to employ such an approach which will call for an international trade requiring an equal tariff between nations—so that we will charge them back what they charge us. For example, in the auto industry, we charge them a 2% tariff on their imports into the United States; they charge us a 24% tariff on goods we export to them. Tariff stability is part of the problem, but it would be easier to be enacted.

It would cause a hell of a stir from our competitors. We would no longer be the patsy. We would be in the position to give our returning troops a recognition of the obligation we owe to them—an obligation which we have ignored for a great number of years.