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Our "Prosperity" Is An Illusion Supported By Debt, Deception & Imports

Published 01/04/08 Thomas Heffner - Print Article
E-mail - editor@economyincisis.org

Americans are now living on borrowed money, outsourced manufacturing, subsidized foreign insourced manufacturing, and a declining manufacturing base. We are gorging ourselves on unaffordable imports (toys, kitchen appliances, clothing and foreign cars) with very little American owned production and earnings.

Debt Since 1987

  • Home mortgages from $1.8 trillion to $8.2 trillion
  • Consumer debt from $2.7 trillion to $11.0 trillion
  • National debt more than $9.0 trillion
  • Household debt has quadrupled
  • Unstoppable and escalating Balance of Trade Deficits:

    Year Balance of Trade Deficit
    2001 $361 billion
    2002 $421 billion
    2003 $495 billion
    2004 $611 billion
    2005 $711 billion
    2006 $765 billion


The 2006 Balance of Trade Deficit debt $765 billion equals $1.45 million dollars per minute flowing out of the country for imports. This is the money foreign interests have been using in the last 25 years to buy out more than 14,000 of our best American companies (see the list of companies sold). By losing ownership of these companies, the profit that is made, the taxes that would have been paid, and the technology now resides in foreign countries.

With a declining tax base due to the loss of these wealth producing companies, our internal budget deficit is increasing and out of control. Our government now has to borrow money from these countries to operate. As of July 2007 we owed Japan $610.9 billion, China $407.8 billion, United Kingdom $201.1 billion and billions to other countries. These countries now finance nearly 100% of our new debts, wars, tax cuts, social programs and infrastructure.

These countries that compete with us are now our bankers. This sounds unbelievable but if these bankers decide to pull their loans, our government could not function. The leverage that they can use to make us bend to their will makes us dangerously vulnerable.

To make our vulnerability even greater, Japan and China have each accumulated approximately $1 trillion dollars of currency reserves through their balance of trade surplus with us. They can now use this money to buy any strategic company that they want to own and control. Most of our companies are for sale daily on the open stock market.

Since so few people believe or want to hear of the fragility of our economy, we have produced music (Click Here To Listen) with an informative and enlightening message that explains our plight.

We encourage you to forward this important message to a friend.

Click here to contact your Representative in Congress.

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Article Comments From Readers

gspencer says "Education" on 01/27/09
In 1956 I graduated from High School, and the Grocery store manager where I worked asked me what I was going to do now. I answered that I was going to eventually get his job. He told me that his job was not paying much more than I was making, and that I should go to college if I wanted to make more Money. I was accepted to Texas A&M and they asked me what course of study I wanted to pursue. I asked them what degree paid the most money, and they told me that Mechanical, Chemical and Electrical Engineering graduates were paid the most. I majored in Mechanical Engineering and got a BSME degree. Even then only about 10% of the ME majors ever got a degree. We told people that we were "Pre-Business" majors.

People should ask about the pay scale for whatever degree that they are pursuing, and be satisfied with that before they waste time getting that type of degree. Pay scale should be a major factor in their degree selection. Pay scale was my only factor in selecting a college major. They should not complain about the low pay scale. Some college degrees (liberal arts) only qualify the graduate for employment in the fast food businesses. I do not believe that any small or large business employs any philosophers, historians, poets, artists, etc., except for janitorial positions.

gspencer says "The US government does not go to the bank and borrow money." on 01/27/09
The US government does not go to the bank and borrow money. They just print money, T-Bills, Bonds, and other Federal Government securities whenever they need to pay their bills.

What if the US government prints up a bunch of new paper money and other similar paper securities to pay people to re-build and expand the US infrastructure (Pork Barrel Projects) in order to reduce unemployment, and it is all then spent on illegal aliens, imported earth-moving machinery, imported materials (Steel, equipment, Pipe & Wire), outsourced engineering, outsourced CAD drafting, immigrant labor, etc., and the US workers are still unemployed? This is probably necessary at this time, even if it will cause massive inflation (until a loaf of bread costs $200.00 or maybe $2,000.00). Any Economic Stimulus Spending also needs to prohibit any imported products (even if we no longer manufacture those products) from being purchased with these funds, and also prohibit all outsourcing of the Labor Required.

Why can't we just buy some paper and print up a bunch of new paper money to pay for the things that we consume. We do not need to work to make anything that we consume. The dollar buying power or value is partly about psychology when it is backed by the "full faith and credit of the US government" rather than gold. This is the same as my definition of "Junk Bonds".

The industrial producing nations and individuals will continue to accept our freshly printed dollars, T-Bills, Government Bonds, etc. as long as we allow the industrial nations and individuals to redeem these freshly printed US money for title to real estate, forests, industries, breweries, hotels, factories, casinos, financial institutions and everything else of value that is located in the USA.

There is (probably) a limit to the amount of paper dollars that the foreign country manufacturing people and the foreign country raw material supplying people will continue to accept in payment for USA imports. This limit will become apparent as soon as foreigners own title to everything of value in the USA and nothing is left that the foreign dollar holders want to buy with their "freshly printed" paper dollars. This is selling of our children's legacy to foreign owners, and the US government calls it "Investing in America".

We paid these foreigners with our freshly printed dollars to manufacture or supply the things that we imported and consumed (rather than US citizens working to make these products ourselves in this country). Some government sources estimate that 25% of our property and businesses are now foreign owned (http://www.economyincrisis.org/content/ownership). The Chinese do not buy very much of what we manufactured. What do we still manufacture that we could sell to China or any other foreign nation????? I cannot think of anything.

guest says "silver is the future" on 05/31/08
http://silvercomments.com

Once the dollar deteriorates silver and gold will be the money for exchange.

guest says "Stupidity thrives in America" on 05/31/08
College degree making $10 an hour I read below - apparently you didn't learn anything of value.

Don't people realize that a US "dollar" is just a debt note not backed by anything ? America went bankrupt in the 1930's when the bankers staged the "great" depression.

guest says "NAFTA and WTO are Bush creations" on 01/30/08
While Clinton was a stealth Republican (philosophically) and evil in signing NAFTA and the WTO into law, we must remember that this was the child of George H.W. Bush.

The premise of the idea was to create a wolf in sheep's clothing to hurt the USA and its people.

NAFTA and the WTO along with CAFTA actively destroy unions, effectively increase global pollution, impoverish and weaken workers in the USA and worldwide, and allow businesses to offshore profits and cheat on taxes while rewarding CEO's with unearned billions in compensation.

Brilliantly evil.

guest says "We the "People" huh?" on 01/29/08
We did it to ourselves when we started buying imports. VW, Toyota, built a better "cheaper" car, and we bought it. It has been a snow ball headed for hell ever since. Now we have the FTA. Thanks to the Clintons.

guest says "Keith" on 01/05/08
Globalization, I believe, is what has led the US to this current status.

http://youaffirm.com

guest says "Nightmare" on 09/19/07
The debt and inflation create the lie.

I'm reminded of the movie by Terence Winkless. In the upcoming movie Dreamcity, the illusion of prosperity is generated by an implanted chip. That seems to be as good an explanation as any.

guest says "Capitalism = corruption" on 09/13/07
Capitalism = corruption. It is a pyramid scheme where a small select group of people and their loyal servants decide to scam the people. They give each other positions on corportations as directors and once in, it's like Flynn!

They can vote themselves as big salaries as they want and because there are cross directorships, it's all a big old boys' networking club and nobody is going to complain. They all have a dip in the honeypot.

The ordinary shareholders and employees are the ones to suffer. The shareholders are to blame for supporting naively this Ponzi scheme and the employees for not organizing themselves into a union and fighting for their rights.

Yes, it's tragic and obscene but the common people are ultimately to blame. They have their much lauded democratic system and whenever they had a chance to change things, Perot, Nader and so on, they didn't choose to do so.

Well, what can you say? It is the way of the world. Evolution. The 'stronger' (more intelligent, cunning and so on) 'eat' the weaker.

Don't pity the Americans. They're responsible for the deaths of millions of people around the world through wars and sanctions and other actions. And these were mostly people who were fighting against oppressors, the same oppressors who rule over America and who Americans supported for so long.

Pleading ignorance or claiming they have been manipulated is no excuse.


guest says "America's kryptonite" on 09/11/07
I totally agree with the comments here. i am working 2 weekday jobs and a part-time weekend job just to keep up with bills. houses are appreciating by the second and inflation is getting higher yet the wages remain the same. The middle class will soon be struggling. Priorities need to be set right. The US should embark on a self healing project to keep itself from imploding. already the mortgage industry is bulging at the seams (i still dont understand how a house made of timber, particle board and other recycled materials can cost $250,000) Its just big business and get rich quick schemes and building companies will pay for it soon.
Needless wars+weak education+no new innovations+debt=disaster

guest says "Our "Prosperity" Is An Illusion Supported By Debt, Deception & Imports" on 08/20/07
History repeats itself. Unfortunately present day American's are Revisionists. So yes the economy is great. BS. I work two jobs, my wife works full time as well. We break even. We've spent the last 10 years paying off creditors. I'm 31. All they people I know make $10 - $13 per hour and we're all college educated. So sure the economy is wonderful. But those who think they have wealth because they borrowed against the equity on their homes are soon going to be dealt a big blow, Indentured Servitude, to the foreign banks who own their mortgages. Sure where I live in three of the outer suburbs of Cincinnati the average household income is $90k per year. The average house price is $750k. So that's a $5k per month mortgage payment. Uncle Sam takes $30k, you shell out $60k on your unfurnished home, and you have to borrow to eat and pay for your Lexus and BMW. Sure the economy is doing great! If the government would say \"Consumer spending is up...and they are spending with credit like there is no tomorrow" I would be so proud. What do American's spend their cash on? Bills. What do American's spend their plastic wealth on? Toys.