Outsourcing and Free Trade are Gutting Our Economy
Americans are deceived into believing that they benefit economically from outsourcing, offshoring production and an unprecedented trade deficit. In reality, the United States giving up its wealth for plastic trinkets and outsourcing is the cause for rising poverty and joblessness all across the nation.
The deceivers emphasize the lower prices of imported products to negate the lost incomes and destroyed careers that result when American workers are replaced by cheaper foreign labor. The deceivers allege that the trade deficit means that we get to consume more of the world’s goods than we produce, with the added benefit that foreigners pay for our excess consumption by investing in America.
The truth of the matter is that “foreign investment” in the United States today consists of Asian central banks, mainly Japan and China, using surplus earnings from massive trade surpluses to prop up the U.S. dollar by purchasing U.S. government bonds, and buying our assets and best companies.
By propping up the dollar, Asia keeps its goods and services cheap, thus worsening the U.S. trade deficit. Washington goes along because Asian countries use their export surpluses to finance the U.S. budget deficit.
The United States has become the world’s largest debtor. The ratio of U.S. external debt (what we owe to foreign entities) and U.S. exports is approaching the crisis ratios of banana republics. It is inevitable: America’s mounting debts will produce a crisis – one greater than the one we have dubbed “the Great Recession.” The dollar’s value will plummet, and U.S. living standards will drop. Everything will become more expensive for Americans.